• CHAPTER 7 CHAPTER 7 ACCOUNTS AND AUDIT

    • 15. 15. General

      Sections 367 to 374 apply to LLPs, modified so that they read as follows —

      • 367. Scheme of this Part

        (1) The requirements of this Part as to accounts and reports apply in relation to each financial year of an LLP.
        (2) In certain respects different provisions apply to different kinds of LLP.
        (3) The main distinction for this purpose is between LLPs subject to the small LLPs regime (see section 368 (LLPs subject to the small LLPs regime)) and LLPs that are not subject to that regime.
        (4) In this Part, where provisions do not apply to all kinds of LLP, provisions applying to LLPs subject to the small LLPs regime appear before the provisions applying to other LLPs.

      • 368. LLPs subject to the small LLPs regime

        The small LLP regime applies to an LLP for a financial year in relation to which the LLP —

        (a) qualifies as small (see sections 369 (general) and 370 (parent LLPs)), and
        (b) is not excluded from the regime (see section 371 (LLPs excluded from the small LLPs regime)).

      • 369. LLPs qualifying as small: general

        (1) An LLP qualifies as small in relation to its first financial year if the qualifying conditions are met in that year.
        (2) Subject to subsection (3), an LLP qualifies as small in relation to a subsequent financial year if the qualifying conditions are met in that year.
        (3) In relation to a subsequent financial year, where on its balance sheet date an LLP meets or ceases to meet the qualifying conditions that affects its qualification as a small LLP only if it occurs in two consecutive financial years.
        (4) The qualifying conditions are met by an LLP in a year in which it satisfies both of the following requirements —
        1. Turnover Not more than 13.5 million US dollars
        2. Number of employees Not more than 35
        (5) For a period that is an LLP's financial year but not in fact a year the maximum figures for turnover must be proportionately adjusted.
        (6) The number of employees means the average number of persons employed by the LLP in the year, determined as follows —
        (a) find for each month in the financial year the number of persons employed under contracts of service by the LLP in that month (whether throughout the month or not),
        (b) add together the monthly totals, and
        (c) divide by the number of months in the financial year.
        (7) This section is subject to section 370 (LLPs qualifying as small: parent LLPs).

      • 370. LLPs qualifying as small: parent LLPs

        (1) A parent LLP qualifies as a small LLP in relation to a financial year only if the group headed by it qualifies as a small group.
        (2) A group qualifies as small in relation to the parent LLP's first financial year if the qualifying conditions are met in that year.
        (3) Subject to subsection (4), a group qualifies as small in relation to a subsequent financial year of the parent LLP if the qualifying conditions are met in that year.
        (4) In relation to a subsequent financial year of the parent LLP, where on the parent LLP's balance sheet date the group meets or ceases to meet the qualifying conditions, that affects the group's qualification as a small group only if it occurs in two consecutive financial years.
        (5) The qualifying conditions are met by a group in a year in which it satisfies both of the following requirements —
        1. Aggregate turnover Not more than 13.5 million US dollars net (or 16.2 million US dollars gross)
        2. Aggregate number of employees Not more than 35
        (6) The aggregate figures are ascertained by aggregating the relevant figures determined in accordance with section 369 (LLPs qualifying as small: general) for each member of the group.
        (7) In relation to the aggregate figures for turnover —

        "net" means after any set offs and other adjustments made to eliminate group transactions in accordance with international accounting standards, and

        "gross" means without those set offs and other adjustments.

        An LLP may satisfy any relevant requirement on the basis of either the net or the gross figure.
        (8) The figures for each subsidiary undertaking shall be those included in its individual accounts for the relevant financial year, that is —
        (a) if its financial year ends with that of the parent LLP, that financial year, and
        (b) if not, its financial year ending last before the end of the financial year of the parent LLP.
        If those figures cannot be obtained without disproportionate expense or undue delay, the latest available figures shall be taken.

      • 371. LLPs excluded from the small LLPs regime

        (1) The small LLPs regime does not apply to an LLP that is, or was at any time within the financial year to which the accounts relate —
        (a) a public interest entity,
        (b) a financial institution, or
        (c) a member of an ineligible group.
        (2) A group is ineligible if any of its members is —
        (a) a public interest entity, or
        (b) a financial institution.

      • 372. Public interest entities and financial institutions

        (1) For the purpose of this Part an LLP is a public interest entity in relation to a financial year if it is a public interest entity immediately before the end of the accounting reference period by reference to which that financial year was determined.
        (2) A "public interest entity" means —
        (a) a company that is listed or an LLP whose securities are listed, on a recognised investment exchange, or
        (b) that is designated by the Board as a public interest entity, because of the nature of its business, its size or the number of its employees.
        (3) For the purposes of this Part a company or an LLP is a "financial institution" in relation to a financial year if it is licensed under the Commercial Licensing Regulations 2015 as a financial institution at any time during the accounting reference period by reference to which that financial year was determined.
        (4) The Board make rules amending or replacing the provisions of subsections (1) to (3) so as to limit or extend the application of some or all of the provisions of this Part that refer to public interest entities and/or financial institutions.

      • 373. LLPs qualifying as micro-entities

        (1) An LLP qualifies as a micro-entity in relation to its first financial year if the qualifying conditions are met in that year.
        (2) Subject to subsection (3), an LLP qualifies as a micro-entity in relation to a subsequent financial year if the qualifying conditions are met in that year.
        (3) In relation to a subsequent financial year, where on its balance sheet date a company meets or ceases to meet the qualifying conditions, that affects its qualification as a micro-entity only if it occurs in two consecutive financial years.
        (4) The qualifying conditions are met by an LLP in a year in which it satisfies both of the following requirements —
        1. Turnover Not more than 2.5 million US dollars
        2. Number of employees Not more than 9
        (5) For a period that is an LLP's financial year but not in fact a year the maximum figures for turnover must be proportionately adjusted.
        (6) The number of employees means the average number of persons employed by the company in the year, determined as follows —
        (a) find for each month in the financial year the number of persons employed under contracts of service by the company in that month (whether throughout the month or not),
        (b) add together the monthly totals, and
        (c) divide by the number of months in the financial year.
        (7) In the case of an LLP which is a parent LLP, the LLP qualifies as a micro-entity in relation to a financial year only if —
        (a) the LLP qualifies as a micro-entity in relation to that year, as determined by subsections (1) to (7), and
        (b) the group headed by the LLP qualifies as a small group, as determined by section 369(2) to (6).

      • 374. LLPs excluded from being treated as micro-entities

        (1) The micro-entity provisions do not apply in relation to an LLP's accounts for a particular financial year if the LLP was at any time within that year an LLP excluded from the small LLPs regime by virtue of section 371 (LLPs excluded from the small LLPs regime).
        (2) The micro-entity provisions also do not apply in relation to an LLP's accounts for a financial year if —
        (a) the LLP is a parent LLP which prepares group accounts for that year as permitted by section 388 (option to prepare group accounts), or
        (b) the LLP is not a parent LLP but its accounts are included in the consolidated group accounts for that year."

    • 16. 16. Accounting records

      Sections 375 to 378 apply to LLPs, modified so that they read as follows —

      • 375. Duty to keep accounting records

        (1) Every LLP must keep adequate accounting records.
        (2) Adequate accounting records means records that are sufficient —
        (a) to show and explain the LLP's transactions,
        (b) to disclose with reasonable accuracy, at any time, the financial position of the LLP at that time, and
        (c) to enable the members to ensure that any accounts required to be prepared comply with the requirements of the Companies Regulations.
        (3) Accounting records must, in particular, contain —
        (a) entries from day to day of all sums of money received and expended by the LLP and the matters in respect of which the receipt and expenditure takes place, and
        (b) a record of the assets and liabilities of the LLP.
        (4) If the LLP's business involves dealing in goods, the accounting records must contain —
        (a) statements of stock held by the LLP at the end of each financial year of the LLP,
        (b) all statements of stocktakings from which any statement of stock as is mentioned in subsection (4)(a) has been or is to be prepared, and
        (c) except in the case of goods sold by way of ordinary retail trade, statements of all goods sold and purchased, showing the goods and the buyers and sellers in sufficient detail to enable all these to be identified.
        (5) A parent LLP that has a subsidiary undertaking in relation to which the above requirements do not apply must take reasonable steps to secure that the undertaking keeps such accounting records as to enable the members of the parent LLP to ensure that any accounts required to be prepared under this Part comply with the requirements of the Companies Regulations.

      • 376. Duty to keep accounting records: contravention

        (1) If an LLP fails to comply with any provision of section 375 (duty to keep accounting records), a contravention of the Companies Regulations is committed by every member of the LLP who is in default.
        (2) A person does not commit the contravention referred to in subsection (1) if he shows that he acted honestly and that in the circumstances in which the LLP's business was carried on the default was excusable.
        (3) A person who commits the contravention referred to in subsection (1) shall be liable to a fine of up to level 5.

      • 377. Where and for how long records to be kept

        (1) An LLP's accounting records —
        (a) must be kept at its registered office or such other place as the members think fit, and
        (b) must at all times be open to inspection by the LLP's members.
        (2) If accounting records are kept at a place outside the Abu Dhabi Global Market, accounts and returns with respect to the business dealt with in the accounting records so kept must be sent to, and kept at, a place in the Abu Dhabi Global Market, and must at all times be open to such inspection.
        (3) The accounts and returns to be sent to the Abu Dhabi Global Market must be such as to —
        (a) disclose with reasonable accuracy the financial position of the business in question at intervals of not more than six months, and
        (b) enable the members to ensure that the accounts required to be prepared under this Part comply with the requirements of the Companies Regulations.
        (4) Accounting records that an LLP is required by section 375 (duty to keep accounting records) to keep must be preserved by it for ten years from the date on which they are made.
        (5) Subsection (4) is subject to any provision contained in other regulation or law applicable in the Abu Dhabi Global Market.

      • 378. Where and for how long records to be kept: contraventions

        (1) If an LLP fails to comply with any provision of subsections (1) to (4) of section 377 (where and for how long records to be kept), a contravention of the Companies Regulations is committed by every member of the LLP who is in default.
        (2) A person does not commit the contravention referred to in subsection (1) if he shows that he acted honestly and that in the circumstances in which the LLP's business was carried on the default was excusable.
        (3) A member of an LLP commits a contravention of the Companies Regulations if he —
        (a) fails to take all reasonable steps for securing compliance by the LLP with subsection (4) of that section (period for which records to be preserved), or
        (b) intentionally causes any default by the LLP under that subsection.
        (4) Subject to subsection (2), a person who commits the contraventions referred to in subsection (1) shall be liable to a level 2 fine.
        (5) A person who commits the contraventions referred to in subsection (3) shall be liable to a fine of up to level 5."

    • 17. 17. An LLP's Financial Year

      Sections 379 to 381 apply to LLPs, modified so that they read as follows —

      • 379. An LLP's financial year

        (1) The financial year of an LLP is determined as follows.
        (2) Its first financial year —
        (a) begins with the first day of its first accounting reference period, and
        (b) ends with the last day of that period or such other date, not more than seven days before or after the end of that period, as the members may determine.
        (3) Subsequent financial years —
        (a) begin with the day immediately following the end of the LLP's previous financial year, and
        (b) end with the last day of its next accounting reference period or such other date, not more than seven days before or after the end of that period, as the members may determine.
        (4) In relation to an undertaking that is not an LLP, references in the Companies Regulations to its financial year are to any period in respect of which a profit and loss account of the undertaking is required to be made up (by its constitution or by the law under which it is established), whether that period is a year or not.
        (5) The members of a parent LLP must secure that, except where in their opinion there are good reasons against it, the financial year of each of its subsidiary undertakings coincides with the LLP's own financial year.

      • 380. Accounting reference periods and accounting reference date

        (1) An LLP's accounting reference periods are determined according to its accounting reference date in each calendar year.
        (2) An LLP's first accounting reference period is the period of more than six months, but not more than 18 months, beginning with the date of its incorporation and ending with its accounting reference date.
        (3) Its subsequent accounting reference periods are successive periods of twelve months beginning immediately after the end of the previous accounting reference period and ending with its accounting reference date.
        (4) This section has effect subject to the provisions of section 381 (alteration of accounting reference date).

      • 381. Alteration of accounting reference date

        (1) An LLP may by notice given to the Registrar specify a new accounting reference date having effect in relation to —
        (a) the LLP's current accounting reference period and subsequent periods, or
        (b) the LLP's previous accounting reference period and subsequent periods.
        An LLP's "previous accounting reference period" means the one immediately preceding its current accounting reference period.
        (2) The notice must state whether the current or previous accounting reference period —
        (a) is to be shortened, so as to come to an end on the first occasion on which the new accounting reference date falls or fell after the beginning of the period, or
        (b) is to be extended, so as to come to an end on the second occasion on which that date falls or fell after the beginning of the period.
        (3) A notice extending an LLP's current or previous accounting reference period is not effective if given less than five years after the end of an earlier accounting reference period of the LLP that was extended under this section.

        This does not apply —
        (a) where the LLP is in administration under Part 1 (administration) of the Insolvency Regulations 2015, or
        (b) where the Registrar directs that it should not apply, which he may do with respect to a notice that has been given or that may be given.
        (4) A notice under this section may not be given in respect of a previous accounting reference period if the period for filing accounts and reports for the financial year determined by reference to that accounting reference period has already expired.
        (5) An accounting reference period may not be extended so as to exceed 18 months and a notice under this section is ineffective if the current or previous accounting reference period as extended in accordance with the notice would exceed that limit.

        This does not apply where the LLP is in administration under Part 1 (administration) of the Insolvency Regulations 2015."

    • 18. 18. Annual Accounts

      Sections 382 to 396 apply to LLPs, modified so that they read as follows —

      • 382. Accounts to give a fair representation

        (1) The members of an LLP must not approve accounts for the purposes of this Chapter unless they are satisfied that they give a fair representation of the assets, liabilities, financial position and profit or loss —
        (a) in the case of the LLP's individual accounts, of the LLP,
        (b) in the case of the LLP's group accounts, of the undertakings included in the consolidation as a whole, so far as concerns members of the LLP.
        (2) The following provisions apply to the members of an LLP which qualifies as a micro-entity in relation to a financial year (see sections 373 (LLPs qualifying as micro-entities) and 374 (LLPs excluded from being treated as micro-entities)) in their consideration of whether the individual accounts of the LLP for that year give a fair representation as required by subsection (1)(a) —
        (a) where the accounts comprise only micro-entity minimum accounting items, the members must disregard any provision of an accounting standard which would require the accounts to contain information additional to those items,
        (b) in relation to a micro-entity minimum accounting item contained in the accounts, the members must disregard any provision of an accounting standard which would require the accounts to contain further information in relation to that item, and
        (c) where the accounts contain an item of information additional to the micro-entity minimum accounting items, the members must have regard to any provision of an accounting standard which relates to that item.
        (3) The auditor of an LLP in carrying out his functions under the Companies Regulations in relation to the LLP's annual accounts must have regard to the members' duty under subsection (1).

      • 383. Duty to prepare individual accounts

        (1) The members of every LLP must prepare accounts for the LLP for each of its financial years unless the LLP is exempt from that requirement under section 384 (individual accounts: exemption for dormant subsidiaries).
        (2) Accounts prepared pursuant to this section are referred to as the LLP's "individual accounts".

      • 384. Individual accounts: exemption for dormant subsidiaries

        (1) An LLP that is otherwise required to prepare individual accounts is exempt from this requirement for a financial year if —
        (a) it is itself a subsidiary undertaking, and
        (b) it has been dormant throughout the whole of that year,
        (2) Exemption is conditional upon compliance with all of the following conditions —
        (a) all members of the LLP must agree to the exemption in respect of the financial year in question,
        (b) the parent undertaking must give a guarantee under section 386 (parent undertaking declaration of guarantee) in respect of that year,
        (c) the LLP must be included in the consolidated accounts drawn up for that year or to an earlier date in that year by the parent undertaking,
        (d) the parent undertaking must disclose in the notes to the consolidated accounts that the LLP is exempt from the requirement to prepare individual accounts by virtue of this section, and
        (e) the members of the LLP must deliver to the Registrar within the period for filing the LLP's accounts and reports for that year —
        (i) a written notice of the agreement referred to in subsection (2)(a),
        (ii) the statement referred to in section 386(1) (parent undertaking declaration of guarantee),
        (iii) a copy of the consolidated accounts referred to in subsection (2)(c),
        (iv) a copy of the auditor's report on those accounts, and
        (v) a copy of the consolidated annual report drawn up by the parent undertaking.

      • 385. LLPs excluded from the dormant subsidiaries exemption

        An LLP is not entitled to the exemption conferred by section 384 (individual accounts: exemption for dormant subsidiaries) if it was at any time within the financial year in question —

        (a) a public interest entity, or
        (b) a financial institution, or
        (c) a member of an ineligible group (as defined in section 371(2) (LLPs excluded from the small LLPs regime))

      • 386. Dormant subsidiaries exemption: parent undertaking declaration of guarantee

        (1) A guarantee is given by a parent undertaking under this section when the members of the subsidiary LLP deliver to the Registrar a statement by the parent undertaking that it guarantees the subsidiary LLP under this section.
        (2) The statement under subsection (1) must be authenticated by the parent undertaking and must specify —
        (a) the name of the parent undertaking,
        (b) if the parent undertaking is incorporated in the Abu Dhabi Global Market, its registered number (if any),
        (c) if the parent undertaking is incorporated outside the Abu Dhabi Global Market and registered in the country in which it is incorporated, the identity of the register on which it is registered and the number with which it is so registered,
        (d) the name and registered number of the subsidiary LLP in respect of which the guarantee is being given,
        (e) the date of the statement, and
        (f) the financial year to which the guarantee relates.
        (3) A guarantee given under this section has the effect that —
        (a) the parent undertaking guarantees all outstanding liabilities to which the subsidiary LLP is subject at the end of the financial year to which the guarantee relates, until they are satisfied in full, and
        (b) the guarantee is enforceable against the parent undertaking by any person to whom the subsidiary LLP is liable in respect of those liabilities.

      • 387. Individual accounts: applicable accounting framework

        (1) An LLP's individual accounts shall be prepared in accordance with international accounting standards ("IAS individual accounts").
        (2) The Board may make rules prescribing (i) the circumstances in which other accounting standards may be adopted for the purpose of preparing an LLP's individual accounts and (ii) the other accounting standards which may be so adopted.

      • 388. Option to prepare group accounts

        If at the end of a financial year an LLP subject to the small LLPs regime is a parent LLP the members, as well as preparing individual accounts for the year, may prepare group accounts for the year.

      • 389. Duty to prepare group accounts

        (1) This section applies to LLPs that are not subject to the small LLPs regime.
        (2) If at the end of a financial year the LLP is a parent LLP the members, as well as preparing individual accounts for the year, must prepare group accounts for the year unless the LLP is exempt from that requirement.
        (3) Group accounts prepared in accordance with this section shall be prepared in accordance with international accounting standards ("IAS group accounts").
        (4) The Board may make rules prescribing other accounting standards which may be adopted for the purpose of preparing group accounts.
        (5) There are exemptions to the requirements of this section under section 390 (exemption for LLP included in group accounts of larger group).
        (6) An LLP to which this section applies but which is exempt from the requirement to prepare group accounts, may do so.

      • 390. Exemption for LLP included in group accounts of larger group

        (1) An LLP is exempt from the requirement to prepare group accounts if it is itself a subsidiary undertaking, in the following cases —
        (a) where the LLP is a wholly-owned subsidiary,
        (b) where its parent undertaking holds more than 50% of the interests in the LLP and notice requesting the preparation of group accounts has not been served on the LLP by members holding in aggregate —
        (i) more than half of the remaining interests in the LLP, or
        (ii) 5% of the total interests in the LLP.
        Such notice must be served not later than six months after the end of the financial year before that to which it relates.
        (2) Exemption is conditional upon compliance with all of the following conditions —
        (a) the LLP and all of its subsidiary undertakings must be included in consolidated accounts for a larger group drawn up to the same date, or to an earlier date in the same financial year, by a parent undertaking,
        (b) those accounts and, where appropriate, the group's annual report, must be drawn up in accordance with the requirements of the Companies Regulations with respect to such accounts and reports or otherwise in a manner equivalent to consolidated accounts and consolidated annual reports so drawn up,
        (c) the group accounts must be audited by one or more persons authorised to audit accounts under the law under which the parent undertaking which draws them up is established,
        (d) the LLP must disclose in its individual accounts that it is exempt from the obligation to prepare and deliver group accounts,
        (e) the LLP must state in its individual accounts the name of the parent undertaking which draws up the group accounts referred to above and —
        (i) if it is incorporated outside the Abu Dhabi Global Market, the country in which it is incorporated, or
        (ii) if it is unincorporated, the address of its principal place of business,
        (f) the LLP must deliver to the Registrar, within the period for filing its accounts and reports for the financial year in question, copies of —
        (i) the group accounts, and
        (ii) where appropriate, the consolidated annual report,
        (iii) together with the auditor's report on them,
        (g) any requirement of Part 31 of the Companies Regulations as to the delivery to the Registrar of a certified translation into English must be met in relation to any document comprised in the accounts and reports delivered in accordance with subsection (2)(f).
        (3) For the purposes of subsection (1)(b), interests held by a wholly-owned subsidiary of the parent undertaking, or held on behalf of the parent undertaking or a wholly-owned subsidiary, are attributed to the parent undertaking.

      • 391. Consistency of financial reporting within group

        (1) The members of a parent LLP must secure that the individual accounts of —
        (a) the parent LLP, and
        (b) each of its subsidiary undertakings,
        are all prepared using the same financial reporting framework, except to the extent that in their opinion there are good reasons for not doing so.
        (2) Subsection (1) does not apply if the members do not prepare group accounts for the parent LLP.
        (3) Subsection (1) only applies to accounts of subsidiary undertakings that are required to be prepared under this Part.
        (4) Subsection (1)(a) does not apply where the members of a parent LLP prepare IAS group accounts and IAS individual accounts.

      • 392. Individual profit and loss account where group accounts prepared

        (1) This section applies where —
        (a) an LLP prepares group accounts in accordance with the Companies Regulations, and
        (b) the notes to the LLP's individual balance sheet show the LLP's profit or loss for the financial year determined in accordance with the Companies Regulations.
        (2) The LLP's individual profit and loss account need not contain the information specified in section 396 (information about employee numbers and costs).
        (3) The LLP's individual profit and loss account must be approved in accordance with section 399(1) (approval by members) but may be omitted from the LLP's annual accounts for the purposes of the other provisions of the Companies Regulations.

      • 393. Information about related undertakings

        (1) The Board may make rules requiring information about related undertakings to be given in notes to an LLP's annual accounts.
        (2) The rules —
        (a) may make different provision according to whether or not the LLP prepares group accounts, and
        (b) may specify the descriptions of undertaking in relation to which it applies, and make different provision in relation to different descriptions of related undertaking.
        (3) The rules may provide that information need not be disclosed with respect to an undertaking that —
        (a) is established under the law of a jurisdiction outside the Abu Dhabi Global Market, or
        (b) carries on business outside the Abu Dhabi Global Market,
        if the following conditions are met.
        (4) The conditions are —
        (a) that in the opinion of the members of the LLP the disclosure would be seriously prejudicial to the business of —
        (i) that undertaking,
        (ii) the LLP,
        (iii) any of the LLP's subsidiary undertakings, or
        (iv) any other undertaking which is included in the consolidation, and
        (b) that the Registrar agrees that the information need not be disclosed.
        Where advantage is taken of any such exemption, that fact must be stated in a note to the LLP's annual accounts.

      • 394. Information about related undertakings: alternative compliance

        (1) This section applies where the members of an LLP are of the opinion that the number of undertakings in respect of which the LLP is required to disclose information under any provision of a rule made under section 393 (information about related undertakings) is such that compliance with that provision would result in information of excessive length being given in notes to the LLP's annual accounts.
        (2) The information need only be given in respect of the undertakings whose results or financial position, in the opinion of the members, principally affected the figures shown in the LLP's annual accounts.
        (3) If advantage is taken of subsection (2) —
        (a) there must be included in the notes to the LLP's annual accounts a statement that the information is given only with respect to such undertakings as are mentioned in that subsection, and
        (b) the full information (both that which is disclosed in the notes to the accounts and that which is not) must be annexed to the LLP's next annual return.
        For this purpose the "next annual return" means that next delivered to the Registrar after the accounts in question have been approved under section 399 (approval and signing of accounts).
        (4) If an LLP fails to comply with subsection (3)(b), a contravention of the Companies Regulations is committed by —
        (a) the LLP, and
        (b) every member of the LLP who is in default.
        (5) A person who commits the contravention referred to in subsection (4) shall be liable to a level 3 fine.

      • 395. Information about off-balance sheet arrangements

        (1) In the case of an LLP that is not subject to the small LLPs regime, if in any financial year —
        (a) the LLP is or has been party to arrangements that are not reflected in its balance sheet, and
        (b) at the balance sheet date the risks or benefits arising from those arrangements are material,
        (c) the information required by this section must be given in notes to the LLP's annual accounts.
        (2) The information required is —
        (a) the nature and business purpose of the arrangements, and
        (b) the financial impact of the arrangements on the LLP.
        (3) The information need only be given to the extent necessary for enabling the financial position of the LLP to be assessed.
        (4) If the LLP qualifies as medium-sized in relation to the financial year (see sections 438 (LLPs qualifying as medium-sized: general) to 440 (LLPs excluded from being treated as medium-sized)) it need not comply with subsection (2)(b).
        (5) This section applies in relation to group accounts as if the undertakings included in the consolidation were a single LLP.

      • 396. Information about employee numbers and costs

        (1) In the case of an LLP not subject to the small LLPs regime, the following information with respect to the employees of the LLP must be given in notes to the LLP's annual accounts —
        (a) the average number of persons employed by the LLP in the financial year, and
        (b) the average number of persons so employed within each category of persons employed by the LLP.
        (2) The categories by reference to which the number required to be disclosed by subsection (1)(b) is to be determined must be such as the members may select having regard to the manner in which the LLP's activities are organised.
        (3) The average number required by subsection (1)(a) or (b) is determined by dividing the relevant annual number by the number of months in the financial year.
        (4) The relevant annual number is determined by ascertaining for each month in the financial year —
        (a) for the purposes of subsection (1)(a), the number of persons employed under contracts of service by the LLP in that month (whether throughout the month or not),
        (b) for the purposes of subsection (1)(b), the number of persons in the category in question of persons so employed,
        (c) and adding together all the monthly numbers.
        (5) In respect of all persons employed by the LLP during the financial year who are taken into account in determining the relevant annual number for the purposes of subsection (1)(a) there must also be stated the aggregate amounts respectively of —
        (a) wages and salaries paid or payable in respect of that year to those persons,
        (b) social security costs incurred by the LLP on their behalf, and
        (c) other pension costs so incurred.
        This does not apply in so far as those amounts, or any of them, are stated elsewhere in the LLP's accounts.
        (6) In subsection (5) —

        "pension costs" includes any costs incurred by the LLP in respect of —
        (a) any pension scheme established for the purpose of providing pensions for persons currently or formerly employed by the LLP,
        (b) any sums set aside for the future payment of pensions or sums due in respect of employees' end-of service gratuity entitlements directly by the LLP to current or former employees, and
        (c) any pensions or end-of service gratuity payments paid directly to such persons without having first been set aside,
        "social security costs" means any contributions by the LLP to any state social security or pension scheme, fund or arrangement.
        (7) This section applies in relation to group accounts as if the undertakings included in the consolidation were a single LLP."

    • 19. 19. Approval and signing of accounts

      Section 399 applies to LLPs, modified so that it reads as follows —

      • 399. Approval and signing of accounts

        (1) An LLP's annual accounts must be approved by the board of members and signed on behalf of the board by a member of the LLP.
        (2) The signature must be on the LLP's balance sheet.
        (3) If the accounts are prepared in accordance with the small LLPs regime, the balance sheet must contain, in a prominent position above the signature:
        (a) in the case of individual accounts prepared in accordance with the micro-entity provisions, a statement to that effect, or
        (b) in the case of accounts not prepared as mentioned in subsection (3)(a), a statement to the effect that the accounts have been prepared in accordance with the provisions applicable to LLPs subject to the small LLPs regime.
        (4) If annual accounts are approved that do not comply with the requirements of the Companies Regulations, every member of the LLP who —
        (a) knew that they did not comply, or was reckless as to whether they complied, and
        (b) failed to take reasonable steps to secure compliance with those requirements or, as the case may be, to prevent the accounts from being approved,
        (c) commits a contravention of the Companies Regulations.
        (5) A person who commits the contravention referred to in subsection (4) shall be liable to a fine of up to level 5."

    • 20. 20. Publication of Accounts and Auditor's Report

      Sections 405 and 407 to 412 apply to LLPs, modified so that they read as follows —

      • 405. Duty to circulate copies of annual accounts and auditor's report

        (1) Every LLP required to prepare annual accounts must send a copy of its annual accounts and auditor's report for each financial year to —
        (a) every member of the LLP, and
        (b) every holder of the LLP's debentures.
        (2) Copies need not be sent to a person for whom the LLP does not have a current address.
        (3) An LLP has a "current address" for a person if —
        (a) an address has been notified to the LLP by the person as one at which documents may be sent to him, and
        (b) the LLP has no reason to believe that documents sent to him at that address will not reach him.
        (4) Where copies are sent out over a period of days, references in the Companies Regulations to the day on which copies are sent out shall be read as references to the last day of that period."

      • 407. Default in sending out copies of accounts and auditor's report: contraventions

        (1) If default is made in complying with section 405 (duty to circulate copies of annual accounts and auditor's report), a contravention of the Companies Regulations is committed by —
        (a) the LLP, and
        (b) every member of the LLP who is in default.
        (2) A person who commits the contravention referred to in subsection (1) shall be liable to a fine of up to level 4.

      • 408. Right of member or debenture holder to copies of accounts and auditor's report

        (1) A member of, or holder of debentures of, an LLP is entitled to be provided, on demand and without charge, with a copy of —
        (a) the LLP's last annual accounts, and
        (b) the auditor's report on those accounts (including the statement on that report).
        (2) The entitlement under this section is to a single copy of those documents, but that is in addition to any copy to which a person may be entitled under section 405 (duty to circulate copies of annual accounts and auditor's report).
        (3) If a demand made under this section is not complied with within seven days of receipt by the LLP, a contravention of the Companies Regulations is committed by —
        (a) the LLP, and
        (b) every member of the LLP who is in default.
        (4) A person who commits the contravention referred to in subsection (3) shall be liable to a fine of up to level 4.

      • 409. Name of signatory to be stated in published copies of accounts and reports

        (1) Every copy of a document to which this section applies that is published by or on behalf of the LLP must state the name of the person who signed it on behalf of the board.
        (2) This section applies to the LLP's balance sheet.
        (3) If a copy is published without the required statement of the signatory's name, a contravention of the Companies Regulations is committed by —
        (a) the LLP, and
        (b) every member of the LLP who is in default.
        (4) A person who commits the contravention referred to in subsection (3) shall be liable to a level 3 fine.

      • 410. Requirements in connection with publication of registrable accounts

        (1) If an LLP publishes any of its registrable accounts, they must be accompanied by the auditor's report on those accounts (unless the LLP is exempt from audit and the members have taken advantage of that exemption).
        (2) An LLP that prepares registrable group accounts for a financial year must not publish its registrable individual accounts for that year without also publishing with them its registrable group accounts.
        (3) An LLP's "registrable accounts" are its accounts for a financial year as required to be delivered to the Registrar under section 415 (duty to file accounts and reports with the Registrar).
        (4) If an LLP contravenes any provision of this section, a contravention of the Companies Regulations is committed by —
        (a) the LLP, and
        (b) every member of the LLP who is in default.
        (5) A person who commits the contravention referred to in subsection (4) shall be liable to a fine of up to level 5.

      • 411. Requirements in connection with publication of non-registrable and other accounts

        (1) If an LLP publishes non-registrable accounts, it must publish with them a statement indicating —
        (a) that they are not the LLP's registrable accounts,
        (b) whether registrable accounts dealing with any financial year with which the non-registrable accounts purport to deal have been delivered to the Registrar, and
        (c) whether an auditor's report has been made on the LLP's registrable accounts for any such financial year, and if so whether the report —
        (i) was qualified or unqualified, or included a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report, or
        (ii) contained a statement under section 469(2) (accounting records or returns inadequate or accounts), or section 469(3) (failure to obtain necessary information and explanations).
        (2) The LLP must not publish with non-registrable accounts the auditor's report on the LLP's registrable accounts.
        (3) References in this section to the publication by an LLP of "non-registrable accounts" are to the publication of —
        (a) any balance sheet or profit and loss account relating to, or purporting to deal with, a financial year (or any part thereof) of the LLP, or
        (b) an account in any form purporting to be a balance sheet or profit and loss account for a group headed by the LLP relating to, or purporting to deal with, a financial year (or any part thereof) of the LLP,
        otherwise than as part of the LLP's registrable accounts.
        (4) In subsection (3)(b) "a group headed by the LLP" means a group consisting of the LLP and any other undertaking (regardless of whether it is a subsidiary undertaking of the LLP) other than a parent undertaking of the LLP.
        (5) If an LLP contravenes any provision of this section, a contravention of the Companies Regulations is committed by —
        (a) the LLP, and
        (b) every member of the LLP who is in default.
        (6) A person who commits the contravention referred to in subsection (5) shall be liable to a fine of up to level 4.

      • 412. Meaning of "publication" in relation to accounts and reports

        (1) This section has effect for the purposes of —

        section 409 (name of signatory to be stated in published copies of accounts and reports),

        section 410 (requirements in connection with publication of registrable accounts), and

        section 411 (requirements in connection with publication of non-registrable accounts).
        (2) For the purposes of those sections an LLP is regarded as publishing a document if it publishes, issues or circulates it (including by making it available on a website) or otherwise makes it available for public inspection in a manner calculated to invite members of the public generally, or any class of members of the public, to read it."

    • 21. 21. Filing of Accounts and Auditor's Report

      Sections 415 to 421 and 423 to 427 apply to LLPs, modified so that they read as follows —

      • 415. Duty to file accounts and reports with the Registrar

        (1) The members of an LLP must deliver to the Registrar for each financial year the accounts and reports required by —

        section 418 (filing obligations of LLPs subject to small LLPs regime),

        section 419 (filing obligations of LLPs entitled to small LLPs exemption: additional requirements),

        section 420 (filing obligations of medium-sized LLPs), and

        section 421 (filing obligations of LLPs generally).
        (2) This is subject to section 423 (dormant subsidiaries exempt from filing obligations).

      • 416. Period allowed for filing accounts

        (1) This section specifies the period allowed for the members of an LLP to comply with their obligation under section 415 (duty to file accounts and reports with the Registrar) to deliver accounts and reports for a financial year to the Registrar. This is referred to in the Companies Regulations as the "period for filing" those accounts and reports.
        (2) The period is for an LLP, nine months after the end of the relevant accounting reference period.

        This is subject to the following provisions of this section.
        (3) If the relevant accounting reference period is the LLP's first and is a period of more than twelve months, the period is —
        (a) nine months or six months, as the case may be, from the first anniversary of the incorporation of the LLP, or
        (b) three months after the end of the accounting reference period, whichever last expires.
        (4) If the relevant accounting reference period is treated as shortened by virtue of a notice given by the LLP under section 381 (alteration of accounting reference date), the period is —
        (a) that applicable in accordance with the above provisions, or
        (b) three months from the date of the notice under that section,
        whichever last expires.
        (5) If for any special reason the Board thinks fit it may, on an application made before the expiry of the period otherwise allowed, by notice in writing to an LLP extend that period by such further period as may be specified in the notice.
        (6) In this section "the relevant accounting reference period" means the accounting reference period by reference to which the financial year for the accounts in question was determined.

      • 417. Calculation of period allowed

        (1) This section applies for the purposes of calculating the period for filing an LLP's accounts and reports which is expressed as a specified number of months from a specified date or after the end of a specified previous period.
        (2) Subject to the following provisions, the period ends with the date in the appropriate month corresponding to the specified date or the last day of the specified previous period.
        (3) If the specified date, or the last day of the specified previous period, is the last day of a month, the period ends with the last day of the appropriate month (whether or not that is the corresponding date).
        (4) If —
        (a) the specified date, or the last day of the specified previous period, is not the last day of a month but is the 29th or 30th, and
        (b) the appropriate month is February,
        the period ends with the last day of February.
        (5) "The appropriate month" means the month that is the specified number of months after the month in which the specified date, or the end of the specified previous period, falls.

      • 418. Filing obligations of LLPs subject to small LLPs regime

        (1) The members of an LLP subject to the small LLPs regime —
        (a) must deliver to the Registrar for each financial year a copy of a balance sheet drawn up as at the last day of that year, and
        (b) may also deliver to the Registrar a copy of the LLP's profit and loss account for that year.
        (2) The members must also deliver to the Registrar a copy of the auditor's report on the accounts that it delivers.

        This does not apply if the LLP is exempt from audit and the members have taken advantage of that exemption.
        (3) Subject to section 419 the copies of accounts and reports delivered to the Registrar must be copies of the LLP's annual accounts and reports.
        (4) The copy of the balance sheet delivered to the Registrar under this section must state the name of the person who signed it on behalf of the board.
        (5) The copy of the auditor's report delivered to the Registrar under this section must —
        (a) state the name of the auditor and (where the auditor is a firm) the name of the person who signed it as senior auditor, or
        (b) if the conditions in section 477 (circumstances in which names may be omitted) are met, state that a determination has been made and notified to the Board in accordance with that section.

      • 419. Filing obligations of LLPs entitled to small LLPs exemption: additional requirements

        (1) Where an LLP prepares accounts which are deliverable to the Registrar under section 418
        (a) the members may deliver to the Registrar a copy of a balance sheet drawn up as prescribed in rules made by the Board, and
        (b) there may be omitted from the copy of the profit and loss account delivered to the Registrar such items as may be specified by the rules made under subsection (1)(a).
        (2) Where the members of an LLP subject to the small LLPs regime deliver to the Registrar accounts, and in accordance with section 418 do not deliver to the Registrar a copy of the LLP's profit and loss account, the copy of the balance sheet delivered to the Registrar must contain in a prominent position a statement that the LLP's annual accounts have been delivered in accordance with the provisions applicable to LLPs subject to the small LLPs regime.

      • 420. Filing obligations of medium-sized LLPs

        (1) The members of an LLP that qualifies as a medium-sized LLP in relation to a financial year (see sections 438 (LLPs qualifying as medium-sized: general) to 440 (LLPs excluded as being treated as medium-sized)) must deliver to the Registrar a copy of the LLP's annual accounts.
        (2) They must also deliver to the Registrar a copy of the auditor's report on those accounts.

        This does not apply if the LLP is exempt from audit and the members have taken advantage of that exemption.
        (3) The copy of the balance sheet delivered to the Registrar under this section must state the name of the person who signed it on behalf of the board.
        (4) The copy of the auditor's report delivered to the Registrar under this section must —
        (a) state the name of the auditor and (where the auditor is a firm) the name of the person who signed it as senior auditor, or
        (b) if the conditions in section 477 (circumstances in which names may be omitted) are met, state that a determination has been made and notified to the Board in accordance with that section.
        (5) This section does not apply to LLPs within section 418 (filing obligations of LLPs subject to the small LLPs regime).

      • 421. Filing obligations of LLPs generally

        (1) The members of an LLP must deliver to the Registrar for each financial year of the LLP a copy of the LLP's annual accounts.
        (2) The members to whom subsection (1) applies must also deliver to the Registrar a copy of the auditor's report on those accounts. This does not apply if the LLP is exempt from audit and the members have taken advantage of that exemption.
        (3) The copy of the balance sheet delivered to the Registrar under this section must state the name of the person who signed it on behalf of the board.
        (4) The copy of the auditor's report delivered to the Registrar under this section must —
        (a) state the name of the auditor and (where the auditor is a firm) the name of the person who signed it as senior auditor, or
        (b) if the conditions in section 477 (circumstances in which names may be omitted) are met, state that a determination has been made and notified to the Board in accordance with that section.
        (5) This section does not apply to LLPs within —
        (a) section 418 (filing obligations of LLPs subject to the small LLPs regime), or
        (b) section 420 (filing obligations of medium-sized LLPs)."

      • 423. Dormant subsidiaries exempt from obligation to file accounts

        (1) The members of an LLP are not required to deliver a copy of the LLP's individual accounts to the Registrar in respect of a financial year if —
        (a) the LLP is a subsidiary undertaking,
        (b) it has been dormant throughout the whole of that year, and
        (c) its parent undertaking is established under the law of the Abu Dhabi Global Market.
        (2) Exemption is conditional upon compliance with all of the following conditions —
        (a) all members of the LLP must agree to the exemption in respect of the financial year in question,
        (b) the parent undertaking must give a guarantee under section 425 (parent undertaking declaration of guarantee) in respect of that year,
        (c) the LLP must be included in the consolidated accounts drawn up for that year or to an earlier date in that year by the parent undertaking in accordance with international accounting standards,
        (d) the parent undertaking must disclose in the notes to the consolidated accounts that the members of the LLP are exempt from the requirement to deliver a copy of the LLP's individual accounts to the Registrar by virtue of this section, and
        (e) the members of the LLP must deliver to the Registrar within the period for filing the LLP's accounts and reports for that year —
        (i) a written notice of the agreement referred to in subsection (2)(a),
        (ii) the statement referred to in section 425(1) (parent undertaking declaration of guarantee),
        (iii) a copy of the consolidated accounts referred to in subsection (2)(c),
        (iv) a copy of the auditor's report on those accounts, and
        (v) a copy of the consolidated annual report drawn up by the parent undertaking.

      • 424. LLPs excluded from the dormant subsidiaries exemption

        The members of an LLP are not entitled to the exemption conferred by section 423 (dormant subsidiaries) if the LLP was at any time within the financial year in question —

        (a) a public interest entity, or
        (b) a financial institution.

      • 425. Dormant subsidiaries filing exemption: parent undertaking declaration of guarantee

        (1) A guarantee is given by a parent undertaking under this section when the members of the subsidiary LLP deliver to the Registrar a statement by the parent undertaking that it guarantees the subsidiary LLP under this section.
        (2) The statement under subsection (1) must be authenticated by the parent undertaking and must specify —
        (a) the name of the parent undertaking and its registered number,
        (b) the name and registered number of the subsidiary LLP in respect of which the guarantee is being given,
        (c) the date of the statement, and
        (d) the financial year to which the guarantee relates.
        (3) A guarantee given under this section has the effect that —
        (a) the parent undertaking guarantees all outstanding liabilities to which the subsidiary LLP is subject at the end of the financial year to which the guarantee relates, until they are satisfied in full, and
        (b) the guarantee is enforceable against the parent undertaking by any person to whom the subsidiary LLP is liable in respect of those liabilities.

      • 426. Default in filing accounts and reports: contraventions

        (1) If the requirements of section 415 (duty to file accounts and reports with the Registrar) are not complied with in relation to an LLP's accounts and reports for a financial year before the end of the period for filing those accounts and reports, the LLP and every person who immediately before the end of that period was a member of the LLP, commits a contravention of the Companies Regulations.
        (2) A person does not commit the contravention referred to in subsection (1) if he proves that he took all reasonable steps for securing that those requirements would be complied with before the end of that period, and for this purpose, it is not enough to prove that the documents in question were not in fact prepared as required by this Part.
        (3) A person who commits the contravention referred to in subsection (1) shall be liable to a fine of up to level 5.

      • 427. Default in filing accounts and reports: Court order

        (1) If —
        (a) the requirements of section 415 (duty to file accounts and reports with the Registrar) are not complied with in relation to an LLP's accounts and reports for a financial year before the end of the period for filing those accounts and reports, and
        (b) the members of the LLP fail to make good the default within 14 days after the service of a notice on them requiring compliance, the Court may, on the application of any member or creditor of the LLP or of the Registrar, make an order directing the members (or any of them) to make good the default within such time as may be specified in the order.
        (2) The Court's order may provide that all costs of and incidental to the application are to be borne by the members."

    • 22. 22. Revision of Defective Accounts

      Sections 428 to 431 apply to LLPs, modified so that they read as follows —

      • 428. Voluntary revision of accounts etc.

        (1) If it appears to the members of an LLP that the LLP's annual accounts did not comply with the requirements of the Companies Regulations, they may prepare revised accounts.
        (2) Where copies of the previous accounts have been sent out to members or delivered to the Registrar, the revisions must be confined to —
        (a) the correction of those respects in which the previous accounts or report did not comply with the requirements of the Companies Regulations, and
        (b) the making of any necessary consequential alterations.
        (3) The Board may make rules as to the application of the provisions of the Companies Regulations in relation to revised annual accounts.
        (4) The rules may, in particular —
        (a) make different provision according to whether the previous accounts are replaced or are supplemented by a document indicating the corrections to be made,
        (b) make provision with respect to the functions of the LLP's auditor in relation to the revised accounts,
        (c) require the members to take such steps as may be specified in the rules where the previous accounts have been —
        (i) sent out to members and others under section 405 (duty to circulate copies of annual accounts and auditor's report), or
        (ii) delivered to the Registrar,
        (d) apply the provisions of the Companies Regulations (including those imposing fines for contraventions of the Companies Regulations) subject to such additions, exceptions and modifications as are specified in the rules.

      • 429. Registrar's notice in respect of accounts

        (1) This section applies where —
        (a) copies of an LLP's annual accounts have been sent out under section 405 (duty to circulate copies of annual accounts and auditor's report), or
        (b) a copy of an LLP's annual accounts report has been delivered to the Registrar,
        and it appears to the Registrar that there is, or may be, a question whether the accounts comply with the requirements of the Companies Regulations.
        (2) The Registrar may give notice to the members of the LLP indicating the respects in which it appears that such a question arises or may arise.
        (3) The notice must specify a period of not less than one month for the members to give an explanation of the accounts or prepare revised accounts.
        (4) If at the end of the specified period, or such longer period as the Registrar may allow, it appears to the Registrar that the members have not —
        (a) given a satisfactory explanation of the accounts, or
        (b) revised the accounts so as to comply with the requirements of the Companies Regulations,
        the Registrar may apply to the Court.
        (5) The provisions of this section apply to revised annual accounts, in which case they have effect as if the references to revised accounts were references to further revised accounts.

      • 430. Application to Court in respect of defective accounts

        (1) An application may be made to the Court —
        (a) by the Registrar, after having complied with section 429 (Registrar's notice in respect of accounts), or
        (b) by a person authorised by the Registrar for the purposes of this section, for a declaration that the annual accounts of an LLP do not comply with the requirements of the Companies Regulations and for an order requiring the members of the LLP to prepare revised accounts.
        (2) Notice of the application, together with a general statement of the matters at issue in the proceedings, shall be given by the applicant to the Registrar for registration.
        (3) If the Court orders the preparation of revised accounts, it may give directions as to —
        (a) the auditing of the accounts, and
        (b) the taking of steps by the members to bring the making of the order to the notice of persons likely to rely on the previous accounts,
        and such other matters as the Court thinks fit.
        (4) If the Court finds that the accounts did not comply with the requirements of the Companies Regulations it may order that all or part of —
        (a) the costs of and incidental to the application, and
        (b) any reasonable expenses incurred by the LLP in connection with or in consequence of the preparation of revised accounts,
        (c) are to be borne by such of the members as were party to the approval of the defective accounts.
        For this purpose every member of the LLP at the time of the approval of the accounts shall be taken to have been a party to the approval unless he shows that he took all reasonable steps to prevent that approval.
        (5) Where the Court makes an order under subsection (5) it shall have regard to whether the members party to the approval of the defective accounts knew or ought to have known that the accounts did not comply with the requirements of the Companies Regulations, and it may exclude one or more members from the order or order the payment of different amounts by different members.
        (6) On the conclusion of proceedings on an application under this section, the applicant must send to the Registrar for registration a copy of the Court order or, as the case may be, give notice to the Registrar that the application has failed or been withdrawn.
        (7) The provisions of this section apply to revised annual accounts, in which case they have effect as if the references to revised accounts were references to further revised accounts.

      • 431. Other persons authorised to apply to the Court

        (1) The Registrar may authorise for the purposes of section 430 (application to Court in respect of defective accounts) (a "section 430 authorisation") any person appearing to it —
        (a) to have an interest in, and to have satisfactory procedures directed to securing, compliance by LLPs with the requirements of the Companies Regulations relating to accounts,
        (b) to have satisfactory procedures for receiving and investigating complaints about LLPs' annual accounts, and
        (c) otherwise to be a fit and proper person to be authorised.
        (2) A person may be authorised generally or in respect of particular classes of case, and different persons may be authorised in respect of different classes of case.
        (3) The Registrar may refuse to authorise a person if it considers that his authorisation is unnecessary having regard to the fact that there are one or more other persons who have been or are likely to be authorised.
        (4) If the authorised person is an unincorporated association, proceedings brought in, or in connection with, the exercise of any function by the association as an authorised person may be brought by or against the association in the name of a body corporate whose constitution provides for the establishment of the association.
        (5) A section 430 authorisation may contain such requirements or other provisions relating to the exercise of functions by the authorised person as appear to the Registrar to be appropriate.

        No such authorisation is to be made unless it appears to the Registrar that the person would, if authorised, exercise his functions as an authorised person in accordance with the provisions proposed.
        (6) Where authorisation is revoked, the Registrar may make such provision as it thinks fit with respect to pending proceedings."

    • 23. 23. Power of authorised person to require documents etc.

      Sections 432 to 435 and 437 to 441 apply to LLPs, modified so that they read as follows —

      • 432. Power of authorised person to require documents, information and explanations

        (1) This section applies where it appears to a person who is authorised under section 431 (other persons authorised to apply to the Court) that there is, or may be, a question whether an LLP's annual accounts complies with the requirements of the Companies Regulations.
        (2) The authorised person may require any of the persons mentioned in subsection (3) to produce any document, or to provide him with any information or explanations, that he may reasonably require for the purpose of —
        (a) discovering whether there are grounds for an application to the Court under section 430 (application to Court in respect of defective accounts), or
        (b) deciding whether to make such an application.
        (3) Those persons are —
        (a) the LLP,
        (b) any member, employee, or auditor of the LLP,
        (c) any persons who fell within subsection (3)(b) at a time to which the document or information required by the authorised person relates.
        (4) If a person fails to comply with such a requirement, the authorised person may apply to the Court.
        (5) If it appears to the Court that the person has failed to comply with a requirement under subsection (2), it may order the person to take such steps as it directs for securing that the documents are produced or the information or explanations are provided.
        (6) Nothing in this section compels any person to disclose documents or information in respect of which a claim to legal professional privilege could be maintained in legal proceedings.
        (7) In this section "document" includes information recorded in any form.

      • 433. Restrictions on disclosure of information obtained under compulsory powers

        (1) This section applies to information (in whatever form) obtained in pursuance of a requirement or order under section 432 (power of authorised person to require documents etc.) that relates to the private affairs of an individual or to any particular business.
        (2) No such information may, during the lifetime of that individual or so long as that business continues to be carried on, be disclosed without the consent of that individual or the person for the time being carrying on that business.
        (3) This does not apply —
        (a) to disclosure permitted by section 434 (permitted disclosure of information obtained under compulsory powers), or
        (b) to the disclosure of information that is or has been available to the public from another source.
        (4) A person who discloses information in contravention of this section commits a contravention of the Companies Regulations, unless —
        (a) he did not know, and had no reason to suspect, that the information had been disclosed under section 432 (power of authorised person to require documents, information and explanations), or
        (b) he took all reasonable steps and exercised all due diligence to avoid the commission of the contravention.
        (5) A person who commits the contravention referred to in subsection (4) shall be liable to a level 3 fine.
        (6) Where a contravention under this section is committed by a body corporate, every officer of the body who is in default also commits the contravention. For this purpose —
        (a) any person who purports to act as director, member (but only where the body is an LLP), manager or secretary of the body is treated as an officer of the body, and
        (b) if the body is a company, any shadow director is treated as an officer of the company.

      • 434. Permitted disclosure of information obtained under compulsory powers

        (1) The prohibition in section 433 (restrictions on disclosure of information obtained under compulsory powers) of the disclosure of information obtained in pursuance of a requirement or order under section 432 (power of authorised person to require documents etc.) that relates to the private affairs of an individual or to any particular business has effect subject to the following exceptions.
        (2) It does not apply to the disclosure of information for the purpose of facilitating the carrying out by the authorised person of his functions under section 430 (application to Court in respect of defective accounts).
        (3) It does not apply to disclosure to —
        (a) the Board,
        (b) the Registrar, or
        (c) the Financial Services Regulator.
        (4) It does not apply to disclosure —
        (a) for the purpose of assisting a body designated by rules to monitor auditors,
        (b) with a view to the institution of, or otherwise for the purposes of, disciplinary proceedings relating to the performance by an accountant or auditor of his professional duties,
        (c) for the purpose of enabling or assisting the Board to exercise its functions under any law or regulation applicable to the Abu Dhabi Global Market.
        (5) It does not apply to disclosure to a body exercising functions of a public nature under legislation in any jurisdiction outside the Abu Dhabi Global Market that appear to the authorised person to be similar to his functions under section 430 (application to Court in respect of defective accounts) for the purpose of enabling or assisting that body to exercise those functions.
        (6) In determining whether to disclose information to a body in accordance with subsection (5), the authorised person must have regard to the following considerations —
        (a) whether the use which the body is likely to make of the information is sufficiently important to justify making the disclosure,
        (b) whether the body has adequate arrangements to prevent the information from being used or further disclosed other than —
        (i) for the purposes of carrying out the functions mentioned in that subsection, or
        (ii) for other purposes substantially similar to those for which information disclosed to the authorised person could be used or further disclosed.

      • 435. Power to amend categories of permitted disclosure

        (1) The Board may make rules amending section 434(3), (4) and (5) (permitted disclosure of information obtained under compulsory powers).
        (2) Rules under this section must not —
        (a) amend subsection (3) of that section (Abu Dhabi Global Market public authorities) by specifying a person unless the person exercises functions of a public nature (whether or not he exercises any other function),
        (b) amend subsection (4) of that section (purposes for which disclosure permitted) by adding or modifying a description of disclosure unless the purpose for which the disclosure is permitted is likely to facilitate the exercise of a function of a public nature,
        (c) amend subsection (5) of that section (overseas regulatory authorities) so as to have the effect of permitting disclosures to be made to a body other than one that exercises functions of a public nature in a jurisdiction outside the Abu Dhabi Global Market."

      • 437. Accounting standards

        (1) In this Part "accounting standards" means international accounting standards or such other standard accounting practice as may be prescribed by rules made by the Board.
        (2) References in this Part to accounting standards applicable to an LLP's annual accounts are to such standards as are, in accordance with their terms, relevant to the LLP's circumstances and to the accounts.
        (3) Rules under this section may contain such transitional and other supplementary and incidental provisions as appear to the Board to be appropriate."

      • 438. LLPs qualifying as medium-sized: general

        (1) An LLP qualifies as medium-sized in relation to its first financial year if the qualifying conditions are met in that year,
        (2) An LLP qualifies as medium-sized in relation to a subsequent financial year —
        (a) if the qualifying conditions are met in that year and the preceding financial year,
        (b) if the qualifying conditions are met in that year and the LLP qualified as medium-sized in relation to the preceding financial year,
        (c) if the qualifying conditions were met in the preceding financial year and the LLP qualified as medium-sized in relation to that year.
        (3) The qualifying conditions are met by an LLP in a year in which it satisfies both of the following requirements —
        1. Turnover Not more than 68 million US dollars
        2. Number of employees Not more than 75
        (4) For a period that is an LLP's financial year but not in fact a year the maximum figures for turnover must be proportionately adjusted.
        (5) The number of employees means the average number of persons employed by the LLP in the year, determined as follows —
        (a) find for each month in the financial year the number of persons employed under contracts of service by the company in that month (whether throughout the month or not),
        (b) add together the monthly totals, and
        (c) divide by the number of months in the financial year.
        (6) This section is subject to section 439 (LLPs qualifying as medium-sized: parent LLPs).

      • 439. LLPs qualifying as medium-sized: parent LLPs

        (1) A parent LLP qualifies as a medium-sized LLP in relation to a financial year only if the group headed by it qualifies as a medium-sized group.
        (2) A group qualifies as medium-sized in relation to the parent LLP's first financial year if the qualifying conditions are met in that year.
        (3) A group qualifies as medium-sized in relation to a subsequent financial year of the parent LLP —
        (a) if the qualifying conditions are met in that year and the preceding financial year,
        (b) if the qualifying conditions are met in that year and the group qualified as medium-sized in relation to the preceding financial year,
        (c) if the qualifying conditions were met in the preceding financial year and the group qualified as medium-sized in relation to that year.
        (4) The qualifying conditions are met by a group in a year in which it satisfies both of the following requirements —
        1. Aggregate turnover Not more than 68 million US dollars
        2. Number of employees Not more than 75
        (5) The aggregate figures are ascertained by aggregating the relevant figures determined in accordance with section 438 (LLPs qualifying as medium-sized: general) for each member of the group.
        (6) In relation to the aggregate figures for turnover —

        "net" means after any set-offs and other adjustments made to eliminate group transactions in accordance with international accounting standards, and

        "gross" means without those set-offs and other adjustments.

        An LLP may satisfy any relevant requirement on the basis of either the net or the gross figure.
        (7) The figures for each subsidiary undertaking shall be those included in its individual accounts for the relevant financial year, that is —
        (a) if its financial year ends with that of the parent company, that financial year, and
        (b) if not, its financial year ending last before the end of the financial year of the parent company.
        If those figures cannot be obtained without disproportionate expense or undue delay, the latest available figures shall be taken.

      • 440. LLPs excluded from being treated as medium-sized

        (1) An LLP is not entitled to take advantage of any of the provisions of this Part relating to LLPs qualifying as medium-sized if it was at any time within the financial year in question —
        (a) a public interest entity,
        (b) a financial institution,
        (c) a member of an ineligible group.
        (2) A group is ineligible if any of its members is —
        (a) a public interest entity,
        (b) a financial institution.

      • 441. General power to make further provision about accounts and reports

        (1) The Board may make rules about —
        (a) the accounts that LLPs are required to prepare,
        (b) the categories of LLPs required to prepare accounts of any description,
        (c) the form and content of the accounts that LLPs are required to prepare,
        (d) the obligations of LLPs and others as regards —
        (i) the approval of accounts,
        (ii) the sending of accounts to members and others,
        (iii) the delivery of copies of accounts to the Registrar, and
        (iv) the publication of accounts.
        (2) The rules may amend this Part by adding, altering or repealing provisions.
        (3) But they must not amend (other than consequentially) —
        (a) section 382 (accounts to give a fair representation), or
        (b) the provisions of Chapter 9 (revision of defective accounts).
        (4) The rules may impose fines (up to a maximum of level 3) for contraventions of the rules."

    • 24. 24. Supplementary Provisions

      Sections 442 and 444 to 446 apply to LLPs, modified so that they read as follows —

      • 442. Preparation and filing of accounts in other relevant currencies

        (1) The amounts set out in the annual accounts of an LLP shall be shown in United States Dollars and may also be shown in the same accounts translated into any other relevant currency.
        (2) When complying with section 415 (duty to file accounts and reports with the Registrar), the members of an LLP may deliver to the Registrar an additional copy of the LLP's annual accounts in which the amounts have been translated into any other relevant currency.
        (3) In both cases —
        (a) the amounts must have been translated at the exchange rate prevailing on the date to which the balance sheet is made up, and
        (b) that rate must be disclosed in the notes to the accounts.
        (4) Subsection (3)(b) does not apply to the individual accounts of an LLP for a financial year in which the LLP qualifies as a micro-entity (see sections 373 (LLPs qualifying as micro-entities) and 374 (LLPs excluded from being treated as micro-entities)).
        (5) For the purposes of sections 410 and 411 (requirements in connection with published accounts) any additional copy of the LLP's annual accounts delivered to the Registrar under subsection (2) above shall be treated as registrable accounts of the LLP.

        In the case of such a copy, references in those sections to the auditor's report on the LLP's annual accounts shall be read as references to the auditor's report on the annual accounts of which it is a copy."

      • 444. Meaning of "annual accounts" and related expressions

        (1) In this Part an LLP's "annual accounts", in relation to a financial year, means —
        (a) any individual accounts prepared by the LLP for that year (see section 383 (duty to prepare individual accounts)), and
        (b) any group accounts prepared by the LLP for that year (see sections 388 (option to prepare group accounts) and 389 (duty to prepare group accounts)).
        This is subject to section 392 (option to omit individual profit and loss account from annual accounts where information given in notes to the individual balance sheet).
        (2) An LLP's "annual accounts" for a financial year are —
        (a) its annual accounts, and
        (b) the auditor's report on those accounts (unless the LLP is exempt from audit).

      • 445. Notes to the accounts

        (1) Information required by this Part to be given in notes to an LLP's annual accounts may be contained in the accounts or in a separate document annexed to the accounts.
        (2) References in this Part to an LLP's annual accounts, or to a balance sheet or profit and loss account, include notes to the accounts giving information which is required by any provision of the Companies Regulations or international accounting standards, and required or allowed by any such provision to be given in a note to LLP accounts.

      • 446. Minor definitions

        (1) In this Part —

        "group" means a parent undertaking and its subsidiary undertakings,

        "included in the consolidation", in relation to group accounts, or "included in consolidated group accounts", means that the undertaking is included in the accounts by the method of full (and not proportional) consolidation, and references to an undertaking excluded from consolidation shall be construed accordingly,

        "international accounting standards" means the international accounting standards specified as such in rules made by the Board,

        "micro-entity minimum accounting item" means an item of information required by this Part or by rules made by the Board under this Part to be contained in the individual accounts of an LLP for a financial year in relation to which it qualifies as a micro-entity (see sections 373 (LLPs qualifying as micro-entities) and 374 (LLPs excluded from being treated as micro-entities)),

        "micro-entity provisions" means any provisions of this Part, Part 15 or rules made by the Board under this Part relating specifically to the individual accounts of an LLP which qualifies as a micro-entity,

        "profit and loss account", includes an income statement or other equivalent financial statement required to be prepared by international accounting standards,

        "turnover", in relation to an LLP, means the amounts derived from the provision of goods and services falling within the LLP's ordinary activities, after deduction of —
        (a) trade discounts,
        (b) value added tax, and
        (c) any other taxes based on the amounts so derived.
        (2) In the case of an undertaking not trading for profit, any reference in this Part to a profit and loss account is to an income and expenditure account.

        References to profit and loss and, in relation to group accounts, to a consolidated profit and loss account shall be construed accordingly."

    • 25. 25. Audit

      Sections 447 to 456 apply to LLPs, modified so that they read as follows —

      • 447. Requirement for audited accounts and public interest entities and financial institutions

        (1) An LLP's annual accounts for a financial year must be audited in accordance with this Part unless the LLP is exempt from audit under —

        section 449 (small LLPs),

        section 452 (subsidiary LLPs), or

        section 455 (dormant LLPs).
        (2) An LLP is not entitled to any such exemption unless its balance sheet contains a statement by the members to that effect.
        (3) An LLP is not entitled to exemption under any of the provisions mentioned in subsection (1) unless its balance sheet contains a statement by the members to the effect that —
        (a) the members have not required the LLP to obtain an audit of its accounts for the year in question in accordance with section 448 (right of members to require audit), and
        (b) the members acknowledge their responsibilities for complying with the requirements of the Companies Regulations with respect to accounting records and the preparation of accounts.
        (4) The statement required by subsection (2) or (3) must appear on the balance sheet above the signature required by section 399 (approval and signing of accounts).
        (5) In this Part, "public interest entity" and "financial institution" shall have the meaning given to them in section 372 (public interest entities and financial institutions).

      • 448. Right of members to require audit

        (1) The members of an LLP that would otherwise be entitled to exemption from audit under any of the provisions mentioned in section 447(1) (exemptions from audit of annual accounts) may by notice under this section require it to obtain an audit of its accounts for a financial year.
        (2) The notice must be given by not less than 10% in number of the members of the LLP.
        (3) The notice may not be given before the financial year to which it relates and must be given not later than one month before the end of that year.

      • 449. Small LLPs: conditions for exemption from audit

        (1) An LLP that qualifies as a small LLP in relation to a financial year is exempt from the requirements of the Companies Regulations relating to the audit of accounts for that year.

        For the purposes of this section whether an LLP qualifies as a small LLP shall be determined in accordance with section 369 (LLPs qualifying as small).
        (2) This section has effect subject to —

        section 447(2) and (3) (requirements as to statements to be contained in balance sheet),

        section 448 (right of members to require audit),

        section 450 (LLPs excluded from small LLPs exemption), and

        section 451 (availability of small LLPs exemption in case of group LLP).

      • 450. LLPs excluded from small LLPs exemption

        An LLP is not entitled to the exemption conferred by section 449 (small LLPs) if it was at any time within the financial year in question —

        (a) a public interest entity, or
        (b) a financial institution.

      • 451. Availability of small LLPs exemption in case of group LLP

        (1) An LLP is not entitled to the exemption conferred by section 449 (small LLPs) in respect of a financial year during any part of which it was a group LLP unless —
        (a) the group —
        (i) qualifies as a small group in relation to that financial year, and
        (ii) was not at any time in that year an ineligible group, or
        (b) subsection (2) applies.
        (2) An LLP is not excluded by subsection (1) if, throughout the whole of the period or periods during the financial year when it was a group LLP, it was both a subsidiary undertaking and dormant.
        (3) In this section —
        (a) "group LLP" means an LLP that is a parent LLP or a subsidiary undertaking, and
        (b) the group", in relation to a group LLP, means that LLP together with all its associated undertakings.
        For this purpose undertakings are associated if one is a subsidiary undertaking of the other or both are subsidiary undertakings of a third undertaking.
        (4) For the purposes of this section —
        (a) whether a group qualifies as small shall be determined in accordance with section 370 (LLPs qualifying as small: parent LLPs), and
        (b) "ineligible group" has the meaning given by section 371(2) (LLPs excluded from the small LLPs regime)
        (5) The provisions mentioned in subsection (4) apply for the purposes of this section as if all the bodies corporate in the group were LLPs.

      • 452. Subsidiary LLPs: conditions for exemption from audit

        (1) An LLP is exempt from the requirements of the Companies Regulations relating to the audit of individual accounts for a financial year if —
        (a) it is itself a subsidiary undertaking, and
        (b) its parent undertaking is established under the law of the Abu Dhabi Global Market.
        (2) Exemption is conditional upon compliance with all of the following conditions —
        (a) all members of the LLP must agree to the exemption in respect of the financial year in question,
        (b) the parent undertaking must give a guarantee under section 454 (parent undertaking declaration of guarantee) in respect of that year,
        (c) the LLP must be included in the consolidated accounts drawn up for that year or to an earlier date in that year by the parent undertaking in accordance with international accounting standards,
        (d) the parent undertaking must disclose in the notes to the consolidated accounts that the LLP is exempt from the requirements of the Companies Regulations relating to the audit of individual accounts by virtue of this section, and
        (e) the members of the LLP must deliver to the Registrar on or before the date that they file the accounts for that year —
        (i) a written notice of the agreement referred to in subsection (2)(a),
        (ii) the statement referred to in section 454(1),
        (iii) a copy of the consolidated accounts referred to in subsection (2)(c),
        (iv) a copy of the auditor's report on those accounts, and (v) a copy of the consolidated annual report drawn up by the parent undertaking.
        (3) This section has effect subject to —

        section 447(2) and (3) (requirements as to statements contained in balance sheet), and

        section 448 (right of members to require audit).

      • 453. LLPs excluded from the subsidiary LLPs audit exemption

        An LLP is not entitled to the exemption conferred by section 452 (subsidiary LLPs) if it was at any time within the financial year in question —

        (a) an LLP whose securities are listed on a recognised investment exchange, or
        (b) a financial institution.

      • 454. Subsidiary LLPs audit exemption: parent undertaking declaration of guarantee

        (1) A guarantee is given by a parent undertaking under this section when the members of the subsidiary LLP deliver to the Registrar a statement by the parent undertaking that it guarantees the subsidiary LLP under this section.
        (2) The statement under subsection (1) must be authenticated by the parent undertaking and must specify —
        (a) the name of the parent undertaking and its registered number,
        (b) the name and registered number of the subsidiary LLP in respect of which the guarantee is being given,
        (c) the date of the statement, and
        (d) the financial year to which the guarantee relates.
        (3) A guarantee given under this section has the effect that —
        (a) the parent undertaking guarantees all outstanding liabilities to which the subsidiary LLP is subject at the end of the financial year to which the guarantee relates, until they are satisfied in full, and
        (b) the guarantee is enforceable against the parent undertaking by any person to whom the subsidiary LLP is liable in respect of those liabilities.

      • 455. Dormant LLPs: conditions for exemption from audit

        (1) An LLP is exempt from the requirements of the Companies Regulations relating to the audit of accounts in respect of a financial year if —
        (a) it has been dormant since its formation, or
        (b) it has been dormant since the end of the previous financial year and the following conditions are met.
        (2) The conditions are that the LLP —
        (a) as regards its individual accounts for the financial year in question —
        (i) is entitled to prepare accounts in accordance with the small LLPs regime (see sections 368 (LLPs subject to the small LLPs regime) to 371 (LLPs excluded from the small LLPs regime)), and
        (ii) is not required to prepare group accounts for that year.
        (3) This section has effect subject to —

        section 447(2) and (3) (requirements as to statements to be contained in balance sheet),

        section 448 (right of members to require audit), and

        section 456 (LLPs excluded from dormant LLPs exemption).

      • 456. LLPs excluded from dormant LLPs exemption

        An LLP is not entitled to the exemption conferred by section 455 (dormant LLPs) if it was at any time within the financial year in question licensed under the Commercial Licensing Regulations 2015 as a financial institution."

    • 26. 26. Appointment of Auditors

      Sections 457 to 460 and 464 to 466 apply to LLPs, modified so that they read as follows —

      • 457. Appointment of auditors of LLPs: general

        (1) An auditor or auditors of an LLP must be appointed for each financial year of the LLP, unless the members reasonably resolve otherwise on the ground that audited accounts are unlikely to be required.
        (2) For each financial year for which an auditor or auditors is or are to be appointed (other than the LLP's first financial year), the appointment must be made before the end of the period of 28 days beginning with —
        (a) the end of the time allowed for sending out copies of the LLP's annual accounts and reports for the previous financial year (see section 405 (duty to circulate copies of annual accounts and auditor's report)), or
        (b) if earlier, the day on which copies of the LLP's annual accounts and reports for the previous financial year are sent out under section 405 (duty to circulate copies of annual accounts and auditor's report).
        This is the "period for appointing auditors".
        (3) The members may appoint an auditor or auditors of the LLP —
        (a) at any time before the LLP's first period for appointing auditors,
        (b) following a period during which the LLP (being exempt from audit) did not have any auditor, at any time before the LLP's next period for appointing auditors, or
        (c) to fill a casual vacancy in the office of auditor.
        (4) The members may appoint an auditor or auditors —
        (a) during a period for appointing auditors,
        (b) if the LLP should have appointed an auditor or auditors during a period for appointing auditors but failed to do so, or
        (c) where the members had power to appoint under subsection (3) but have failed to make an appointment.
        (5) An auditor or auditors of an LLP may only be appointed —
        (a) in accordance with this section,
        (b) in accordance with section 458 (default power of Registrar), or
        This is without prejudice to any deemed re-appointment under section 459 (term of office of auditors of LLPs).

      • 458. Appointment of auditors of LLPs: default power of Registrar

        (1) If an LLP fails to appoint an auditor or auditors in accordance with section 457 (appointment of auditors of LLPs: general), the Registrar may appoint one or more persons to fill the vacancy.
        (2) Where subsection (2) of that section applies and the LLP fails to make the necessary appointment before the end of the period for appointing auditors, the LLP must within one week of the end of that period give notice to the Registrar of its power having become exercisable.
        (3) If an LLP fails to give the notice required by this section, a contravention of the Companies Regulations is committed by —
        (a) the LLP, and
        (b) every designated member of the LLP who is in default.
        (4) A person who commits the contravention referred to in subsection (3) shall be liable to a level 3 fine.

      • 459. Term of office of auditors of LLPs

        (1) An auditor or auditors of an LLP hold office in accordance with the terms of their appointment, subject to the requirements that —
        (a) they do not take office until any previous auditor or auditors cease to hold office, and
        (b) they cease to hold office at the end of the next period for appointing auditors unless re-appointed.
        (2) Where no auditor has been appointed by the end of the next period for appointing auditors, any auditor in office immediately before that time is deemed to be re-appointed at that time, unless —
        (a) the LLP agreement requires actual re-appointment, or
        (b) the deemed re-appointment is prevented by the members under section 460 (prevention by members of deemed re-appointment of auditor), or
        (c) the members have determined that he should not be re-appointed, or
        (d) the members have determined that no auditor or auditors should be appointed for the financial year in question.
        (3) This is without prejudice to the provisions of this Part as to removal and resignation of auditors.
        (4) No account shall be taken of any loss of the opportunity of deemed reappointment under this section in ascertaining the amount of any compensation or damages payable to an auditor on his ceasing to hold office for any reason.

      • 460. Prevention by members of deemed re-appointment of auditor

        (1) An auditor of an LLP is not deemed to be re-appointed under section 459(2) if the LLP has received notices under this section from members representing at least the requisite percentage of the total voting rights in the LLP that the auditor should not be re-appointed.
        (2) The "requisite percentage" is 5%, or such lower percentage as is specified for this purpose in the LLP agreement.
        (3) A notice under this section —
        (a) may be in hard copy or electronic form,
        (b) must be authenticated by the person or persons giving it, and
        (c) must be received by the LLP before the end of the accounting reference period immediately."

      • 464. Fixing of auditor's remuneration

        (1) The remuneration of an auditor appointed by the members of an LLP must be fixed by the members or in such manner as the members may determine.
        (2) The remuneration of an auditor appointed by the Registrar must be fixed by the Registrar.
        (3) For the purposes of this section "remuneration" includes sums paid in respect of expenses.
        (4) This section applies in relation to benefits in kind as to payments of money.

      • 465. Disclosure of terms of audit appointment

        (1) The Board may make rules for securing the disclosure of the terms on which an LLP's auditor is appointed, remunerated or performs his duties.

        Nothing in the following provisions of this section affects the generality of this power.
        (2) The rules may —
        (a) require disclosure of —
        (i) a copy of any terms that are in writing, and
        (ii) a written memorandum setting out any terms that are not in writing,
        (b) require disclosure to be at such times, in such places and by such means as are specified in the rules,
        (c) require the place and means of disclosure to be stated —
        (i) in a note to the LLP's annual accounts (in the case of its individual accounts) or in such manner as is specified in the rules (in the case of group accounts), or
        (ii) in the auditor's report on the LLP's annual accounts.
        (3) The provisions of this section apply to a variation of the terms mentioned in subsection (1) as they apply to the original terms.

      • 466. Disclosure of services provided by auditor or associates and related remuneration

        (1) The Board may make rules for securing the disclosure of —
        (a) the nature of any services provided for an LLP by the LLP's auditor (whether in his capacity as auditor or otherwise) or by his associates,
        (b) the amount of any remuneration received or receivable by an LLP's auditor, or his associates, in respect of any such services.
        Nothing in the following provisions of this section affects the generality of this power.
        (2) The rules may provide —
        (a) for disclosure of the nature of any services provided to be made by reference to any class or description of services specified in the rules (or any combination of services, however described),
        (b) for the disclosure of amounts of remuneration received or receivable in respect of services of any class or description specified in the rules (or any combination of services, however described),
        (c) for the disclosure of separate amounts so received or receivable by the LLP's auditor or any of his associates, or of aggregate amounts so received or receivable by all or any of those persons.
        (3) The rules may —
        (a) provide that "remuneration" includes sums paid in respect of expenses,
        (b) apply to benefits in kind as well as to payments of money, and require the disclosure of the nature of any such benefits and their estimated money value,
        (c) apply to services provided for associates of an LLP as well as to those provided for an LLP,
        (d) define "associate" in relation to an auditor and a company respectively.
        (4) The rules may provide that any disclosure required by the rules is to be made —
        (a) in a note to the LLP's annual accounts (in the case of its individual accounts) or in such manner as is specified in the rules (in the case of group accounts), or
        (b) in the auditor's report on the LLP's annual accounts.
        (5) If the rules provide that any such disclosure is to be made as mentioned in subsection (4)(a) the rules may require the auditor to supply the members of the LLP with any information necessary to enable the disclosure to be made.

    • 27. 27. Functions of Auditor

      Sections 467 and 469 to 478 apply to LLPs, modified so that they read as follows —

      • 467. Auditor's report on LLP's annual accounts

        (1) An LLP's auditor must make a report to the LLP's members on all annual accounts of the LLP of which copies are, during his tenure of office to be sent out to members under section 405 (duty to circulate copies of annual accounts and auditor's report),
        (2) The auditor's report must include —
        (a) an introduction identifying the annual accounts that are the subject of the audit and the financial reporting framework that has been applied in their preparation, and
        (b) a description of the scope of the audit identifying the auditing standards in accordance with which the audit was conducted.
        (3) The report must state clearly whether, in the auditor's opinion, the annual accounts —
        (a) fairly present —
        (i) in the case of an individual balance sheet, the state of affairs of the LLP as at the end of the financial year,
        (ii) in the case of an individual profit and loss account, the profit or loss of the LLP for the financial year,
        (iii) in the case of group accounts, the state of affairs as at the end of the financial year and of the profit or loss for the financial year of the undertakings included in the consolidation as a whole, so far as concerns members of the LLP,
        (j) have been properly prepared in accordance with the relevant financial reporting framework, and
        (k) have been prepared in accordance with the requirements of the Companies Regulations.

        Expressions used in this subsection or subsection (4) that are defined for the purposes of Part 14 (see sections 437 (accounting standards), 444 (meaning of "annual accounts" and related expressions) and 446 (minor definitions)) have the same meaning as in that Part.
        (4) The following provisions apply to the auditors of an LLP which qualifies as a micro-entity in relation to a financial year (see sections 373 (LLPs qualifying as micro-entities) and 374 (LLPs excluded from being treated as micro-entities)) in their consideration of whether the individual accounts of the LLP for that year give a fair representation as mentioned in subsection (3)(a) —
        (a) where the accounts comprise only micro-entity minimum accounting items, the auditors must disregard any provision of an accounting standard which would require the accounts to contain information additional to those items,
        (b) in relation to a micro-entity minimum accounting item contained in the accounts, the auditors must disregard any provision of an accounting standard which would require the accounts to contain further information in relation to that item, and
        (c) where the accounts contain an item of information additional to the microentity minimum accounting items, the auditors must have regard to any provision of an accounting standard which relates to that item.
        (5) The auditor's report —
        (a) must be either unqualified or qualified, and
        (b) must include a reference to any matters to which the auditor wishes to draw attention by way of emphasis without qualifying the report."

      • 469. Duties of auditor

        (1) An LLP's auditor, in preparing his report, must carry out such investigations as will enable him to form an opinion as to —
        (a) whether adequate accounting records have been kept by the LLP and returns adequate for their audit have been received from branches not visited by him, and
        (b) whether the LLP's individual accounts are in agreement with the accounting records and returns.
        (2) If the auditor is of the opinion —
        (a) that adequate accounting records have not been kept, or that returns adequate for their audit have not been received from branches not visited by him, or
        (b) that the LLP's individual accounts are not in agreement with the accounting records and returns, the auditor shall state that fact in his report.
        (3) If the auditor fails to obtain all the information and explanations which, to the best of his knowledge and belief, are necessary for the purposes of his audit, he shall state that fact in his report.
        (4) If the members of the LLP have prepared accounts in accordance with the small LLPs regime, and in the auditor's opinion they were not entitled to do so, the auditor shall state that fact in his report.

      • 470. Auditor's general right to information

        (1) An auditor of an LLP —
        (a) has a right of access at all times to the LLP's books, accounts and vouchers (in whatever form they are held), and
        (b) may require any of the following persons to provide him with such information or explanations as he thinks necessary for the performance of his duties as auditor.
        (2) Those persons are —
        (a) any member or employee of the LLP,
        (b) any person holding or accountable for any of the LLP's books, accounts or vouchers,
        (c) any subsidiary undertaking of the LLP which is a body corporate incorporated in the Abu Dhabi Global Market,
        (d) any officer, employee or auditor of any such subsidiary undertaking or any person holding or accountable for any books, accounts or vouchers of any such subsidiary undertaking,
        (e) any person who fell within any of subsection (2)(a) to (d) at a time to which the information or explanations required by the auditor relates or relate.
        (3) Nothing in this section compels a person to disclose information in respect of which a claim to legal professional privilege could be maintained in legal proceedings.

      • 471. Auditor's right to information from overseas subsidiary undertakings

        (1) Where a parent LLP has a subsidiary undertaking that is not a body corporate incorporated in the Abu Dhabi Global Market, the auditor of the parent LLP may require it to obtain from any of the following persons such information or explanations as he may reasonably require for the purposes of his duties as auditor.
        (2) Those persons are —
        (a) the undertaking,
        (b) any officer, employee or auditor of the undertaking,
        (c) any person holding or accountable for any of the undertaking's books, accounts or vouchers,
        (d) any person who fell within subsection (2)(b) or (c) at a time to which the information or explanations relates or relate.
        (3) If so required, the parent LLP must take all such steps as are reasonably open to it to obtain the information or explanations from the person concerned.
        (4) Nothing in this section compels a person to disclose information in respect of which a claim to legal professional privilege could be maintained in legal proceedings.

      • 472. Auditor's rights to information: contraventions

        (1) A person commits a contravention of the Companies Regulations who knowingly or recklessly makes to an auditor of an LLP a statement (oral or written) that —
        (a) conveys or purports to convey any information or explanations which the auditor requires, or is entitled to require, under section 470 (auditor's general right to information), and
        (b) is misleading, false or deceptive in a material particular.
        (2) A person who commits the contravention referred to in subsection (1) shall be liable to a fine of up to level 5.
        (3) A person who fails to comply with a requirement under section 470 (auditor's general right to information) without delay commits a contravention of the Companies Regulations unless it was not reasonably practicable for him to provide the required information or explanations.
        (4) If a parent LLP fails to comply with section 471 (auditor's right to information from overseas subsidiary undertakings), a contravention of the Companies Regulations is committed by —
        (a) the LLP, and
        (b) every member of the LLP who is in default.
        (5) A person who commits the contravention referred to in subsection (3) shall be liable to a fine of up to level 4.
        (6) A person who commits the contravention referred to in subsection (4) shall be liable to a level 3 fine.
        (7) Nothing in this section affects any right of an auditor to apply for an injunction to enforce any of his rights under section 470 (general right to information) or 471 (right to information from overseas subsidiary undertakings).

      • 473. Auditor's rights in relation to meetings

        (1) An LLP's auditor is entitled —
        (a) to receive all notices of, and other communications relating to, any meeting which a member of the LLP is entitled to receive, where any part of the business of the meeting concerns them as auditors,
        (b) to attend any meeting of the LLP where any part of the business of the meeting concerns them as auditors, and
        (c) to be heard at any meeting which he attends on any part of the business of the meeting which concerns him as auditor.
        (2) Where the auditor is a firm, the right to attend or be heard at a meeting is exercisable by an individual authorised by the firm in writing to act as its representative at the meeting.

      • 474. Signature of auditor's report

        (1) The auditor's report must state the name of the auditor and be signed and dated.
        (2) Where the auditor is an individual, the report must be signed by him.
        (3) Where the auditor is a firm, the report must be signed by the senior auditor in his own name, for and on behalf of the auditor.

      • 475. Senior auditor

        (1) The senior auditor means the individual identified by the firm as senior auditor in relation to the audit in accordance with —
        (a) standards issued by the Board, or
        (b) if there is no applicable standard so issued, any relevant guidance issued by —
        (i) the Board, or
        (ii) a body appointed by the Board.
        (2) The person identified as senior auditor must be eligible for appointment as auditor of the LLP in question (see Chapter 2 of Part 35 of the Companies Regulations).
        (3) The senior auditor is not, by reason of being named or identified as senior auditor or by reason of his having signed the auditor's report, subject to any civil liability to which he would not otherwise be subject.

      • 476. Names to be stated in published copies of auditor's report

        (1) Every copy of the auditor's report that is published by or on behalf of the LLP must —
        (a) state the name of the auditor and (where the auditor is a firm) the name of the person who signed it as senior auditor, or
        (b) if the conditions in section 477 (circumstances in which names may be omitted) are met, state that a resolution has been passed and notified to the Board in accordance with that section.
        (2) For the purposes of this section an LLP is regarded as publishing the report if it publishes, issues or circulates it or otherwise makes it available for public inspection in a manner calculated to invite members of the public generally, or any class of members of the public, to read it.
        (3) If a copy of the auditor's report is published without the statement required by this section, a contravention of the Companies Regulations is committed by —
        (a) the LLP, and
        (b) every designated member of the LLP who is in default.
        (4) A person who commits the contravention referred to in subsection (3) shall be liable to a level 3 fine.

      • 477. Circumstances in which names may be omitted

        (1) The auditor's name and, where the auditor is a firm, the name of the person who signed the report as senior auditor, may be omitted from —
        (a) published copies of the report, and
        (b) the copy of the report delivered to the Registrar under Chapter 8 of Part 14 (filing of accounts and reports),
        (c) if the following conditions are met.
        (2) The conditions are that the LLP —
        (a) considering on reasonable grounds that statement of the name would create or be likely to create a serious risk that the auditor or senior auditor, or any other person, would be subject to violence or intimidation, has determined that the name should not be stated, and
        (b) has given notice of the determination to the Registrar, stating —
        (i) the name and registered number of the LLP,
        (ii) the financial year of the LLP to which the report relates, and
        (iii) the name of the auditor and (where the auditor is a firm) the name of the person who signed the report as senior auditor.

      • 478. Contraventions in connection with auditor's report

        (1) A person to whom this section applies commits a contravention of the Companies Regulations if he knowingly or recklessly causes a report under section 467 (auditor's report on LLP's annual accounts) to include any matter that is misleading, false or deceptive in a material particular.
        (2) A person to whom this section applies commits a contravention of the Companies Regulations if he knowingly or recklessly causes such a report to omit a statement required by —
        (a) section 469(2)(b) (statement that LLP's accounts do not agree with accounting records and returns),
        (b) section 469(3) (statement that necessary information and explanations not obtained), or
        (c) section 469(4) (statement that members wrongly took advantage of exemption from obligation to prepare group accounts).
        (3) This section applies to —
        (a) where the auditor is an individual, that individual and any employee or agent of his who is eligible for appointment as auditor of the LLP,
        (b) where the auditor is a firm, any member, member, employee or agent of the firm who is eligible for appointment as auditor of the LLP.
        (4) A person who commits the contraventions referred to in subsection (1) and (2) shall be liable to a fine of up to level 5."

    • 28. 28. Removal, Resignation, etc of Auditors

      Sections 479 to 483 and 485 to 499 apply to LLPs, modified so that they read as follows —

      • 479. Removal of auditor from office

        (1) The members of an LLP may remove an auditor from office at any time.
        (2) Nothing in this section is to be taken as depriving the person removed of compensation or damages payable to him in respect of the termination —
        (a) of his appointment as auditor, or
        (b) of any appointment terminating with that as auditor.
        (3) An auditor may not be removed from office before the expiration of his term of office except under this section.

      • 480. Notice of removal of auditor

        (1) No determination to remove an auditor before the expiration of his term of office may be made under section 479 unless the LLP has given 7 days' prior notice to any auditor whom it is proposed to remove.
        (2) The auditor proposed to be removed may make with respect to the proposal representations in writing to the LLP (not exceeding a reasonable length) and request their notification to members of the LLP.
        (3) The LLP must upon receipt send a copy of the representations to every member of the LLP.
        (4) Copies of the representations need not be sent out and the representations need not be sent out, on the application either of the LLP or of any other person claiming to be aggrieved, the Court is satisfied that the auditor is using the provisions of this section to secure needless publicity for defamatory matter.

        The Court may order the LLP's costs on the application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application.

      • 481. Notice to Registrar of determination removing auditor from office

        (1) Where the members of an LLP have removed an auditor from office under section 479 (removal of auditor from office), the LLP must give notice of that fact to the Registrar within 14 days.
        (2) If the LLP fails to give the notice required by this section, a contravention of the Companies Regulations is committed by —
        (a) the LLP, and
        (b) every designated member who is in default.
        (3) A person who commits the contravention referred to in subsection (2) shall be liable to a level 2 fine.

      • 482. Rights of auditor who has been removed from office

        (1) An auditor who has been removed under section 479 (removal of auditor from office) has, notwithstanding his removal, the rights conferred by section 473(1) (auditor's rights in relation to meetings) in relation to any meeting of the LLP —
        (a) at which his term of office would otherwise have expired, or
        (b) at which it is proposed to fill the vacancy caused by his removal.
        (2) In such a case the references in that section to matters concerning the auditor as auditor shall be construed as references to matters concerning him as a former auditor.

      • 483. Failure to re-appoint auditor: rights of auditor who is not reappointed

        (1) No person may be appointed as auditor in place of a person (the "outgoing auditor") whose term of office has ended or is to end at the end of the period for appointing auditors unless the LLP has given 7 days' prior notice to the outgoing auditor.
        (2) The outgoing auditor may make with respect to the proposal representations in writing to the LLP (not exceeding a reasonable length) and request their notification to members of the LLP.
        (3) The LLP must upon receipt send a copy of the representations to every member.
        (4) Copies of the representations need not be sent out if, on the application either of the LLP or of any other person claiming to be aggrieved, the Court is satisfied that the auditor is using the provisions of this section to secure needless publicity for defamatory matter. The Court may order the LLP's costs on the application to be paid in whole or in part by the auditor, notwithstanding that he is not party to the application.

      • 485. Resignation of auditor

        (1) An auditor of an LLP may resign his office by depositing a notice in writing to that effect at the LLP's registered office.
        (2) The notice is not effective unless it is accompanied by the statement required by section 488 (statement by auditor to be deposited with LLP).
        (3) An effective notice of resignation operates to bring the auditor's term of office to an end as of the date on which the notice is deposited or on such later date as may be specified in it.

      • 486. Notice to Registrar of resignation of auditor

        (1) Where an auditor resigns the LLP must within 14 days of the deposit of a notice of resignation send a copy of the notice to the Registrar of LLPs.
        (2) If default is made in complying with this section, a contravention of the Companies Regulations is committed by —
        (a) the LLP, and
        (b) every designated member of the LLP who is in default.
        (3) A person who commits the contravention referred to in subsection (2) shall be liable to a level 2 fine.

      • 487. Rights of resigning auditor

        (1) This section applies where an auditor's notice of resignation is accompanied by a statement of the circumstances connected with his resignation (see section 488 (statement by auditor to be deposited with LLP).
        (2) A resigning auditor may deposit with the notice a signed requisition calling on the members of the LLP forthwith duly to convene a meeting of the LLP for the purpose of receiving and considering such explanation of the circumstances connected with his resignation as he may wish to place before the meeting.
        (3) A resigning auditor may request the LLP to circulate to its members before the meeting convened on his requisition a statement in writing (not exceeding a reasonable length) of the circumstances connected with his resignation.
        (4) The LLP must (unless the statement is received too late for it to comply) —
        (a) in any notice of the meeting given to members of the LLP, state the fact of the statement having been made, and
        (b) send a copy of the statement to every member of the LLP to whom notice of the meeting is or has been sent.
        (5) The members must within 21 days from the date of the deposit of a requisition under this section proceed duly to convene a meeting for a day not more than 28 days after the date on which the notice convening the meeting is given.
        (6) If default is made in complying with subsection (5), every member who failed to take all reasonable steps to secure that a meeting was convened commits a contravention of the Companies Regulations.
        (7) A person who commits the contravention referred to in subsection (6) shall be liable to a level 3 fine.
        (8) If a copy of the statement mentioned above is not sent out as required because received too late or because of the LLP's default, the auditor may (without prejudice to his right to be heard orally) require that the statement be read out at the meeting.
        (9) Copies of a statement need not be sent out and the statement need not be read out at the meeting if, on the application either of the LLP or of any other person who claims to be aggrieved, the Court is satisfied that the auditor is using the provisions of this section to secure needless publicity for defamatory matter.

        The Court may order the LLP's costs on such an application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application.
        (10) An auditor who has resigned has, notwithstanding his resignation, the rights conferred by section 473(2) (auditor's rights in relation to meetings) in relation to any such meeting of the LLP as is mentioned in subsection (3) above. In such a case the references in that section to matters concerning the auditor as auditor shall be construed as references to matters concerning him as a former auditor.

      • 488. Statement by auditor to be deposited with LLP

        (1) Where an auditor of an LLP ceases for any reason to hold office, he must deposit at the LLP's registered office a statement of the circumstances connected with his ceasing to hold office, unless he considers that there are no circumstances in connection with his ceasing to hold office that need to be brought to the attention of members or creditors of the LLP.
        (2) If he considers that there are no circumstances in connection with his ceasing to hold office that need to be brought to the attention of members or creditors of the LLP, he must deposit at the LLP's registered office a statement to that effect.
        (3) The statement required by this section must be deposited —
        (a) in the case of resignation, along with the notice of resignation,
        (b) in the case of failure to seek re-appointment, not less than 14 days before the end of the time allowed for next appointing an auditor,
        (c) in any other case, not later than the end of the period of 14 days beginning with the date on which he ceases to hold office.
        (4) A person ceasing to hold office as auditor who fails to comply with this section commits a contravention of the Companies Regulations.
        (5) A person does not commit the contravention referred to in subsection (4) if he shows that he took all reasonable steps and exercised all due diligence to avoid the commission of the contravention.
        (6) A person who commits the contravention referred to in subsection (4) shall be liable to a fine of up to level 4.
        (7) Where a contravention under this section is committed by a body corporate, every officer of the body who is in default also commits the contravention.

        For this purpose —
        (a) any person who purports to act as director, manager or secretary of the body is treated as an officer of the body, and
        (b) if the body is a company, any shadow director is treated as an officer of the company.

      • 489. LLP's duties in relation to statement

        (1) This section applies where the statement deposited under section 488 (statement by auditor to be deposited with LLP) states the circumstances connected with the auditor's ceasing to hold office.
        (2) The LLP must within 14 days of the deposit of the statement either —
        (a) send a copy of it to every person who under section 405 (duty to circulate copies of annual accounts and auditor's report) is entitled to be sent copies of the accounts, or
        (b) apply to the Court.
        (3) If it applies to the Court, the LLP must notify the auditor of the application.
        (4) If the Court is satisfied that the auditor is using the provisions of section 488 (statement by auditor to be deposited with LLP) to secure needless publicity for defamatory matter —
        (a) it shall direct that copies of the statement need not be sent out, and
        (b) it may further order the LLP's costs on the application to be paid in whole or in part by the auditor, even if he is not a party to the application.
        The LLP must within 14 days of the Court's decision send to the persons mentioned in subsection (2)(a) a statement setting out the effect of the order.
        (5) If no such direction is made the LLP must send copies of the statement to the persons mentioned in subsection (2)(a) within 14 days of the Court's decision or, as the case may be, of the discontinuance of the proceedings.
        (6) In the event of default in complying with this section a contravention of the Companies Regulations is committed by every designated member of the LLP who is in default.
        (7) A person does not commit the contravention referred to in subsection (6) if he shows that he took all reasonable steps and exercised all due diligence to avoid the commission of the contravention.
        (8) A person who commits the contravention referred to in subsection (6) shall be liable to a level 3 fine.

      • 490. Copy of statement to be sent to Registrar

        (1) Unless within 21 days beginning with the day on which he deposited the statement under section 488 (statement by auditor to be deposited with LLP) the auditor receives notice of an application to the Court under section 489 (LLP's duties in relation to statement), he must within a further seven days send a copy of the statement to the Registrar.
        (2) If an application to the Court is made under section 489 (LLP's duties in relation to statement) and the auditor subsequently receives notice under subsection (3) of that section, he must within seven days of receiving the notice send a copy of the statement to the Registrar.
        (3) An auditor who fails to comply with subsection (1) or (2) commits a contravention of the Companies Regulations.
        (4) A person does not commit the contravention referred to in subsection (3) if he shows that he took all reasonable steps and exercised all due diligence to avoid the commission of the contravention.
        (5) A person who commits the contravention referred to in subsection (3) shall be liable to a level 2 fine.
        (6) Where a contravention under this section is committed by a body corporate, every officer of the body who is in default also commits the contravention.

        For this purpose —
        (a) any person who purports to act as director, manager or secretary of the body is treated as an officer of the body, and
        (b) if the body is a company, any shadow director is treated as an officer of the company.

      • 491. Duty of auditor to notify appropriate audit authority

        (1) Where —
        (a) in the case of a major audit, an auditor ceases for any reason to hold office, or
        (b) in the case of an audit that is not a major audit, an auditor ceases to hold office before the end of his term of office,
        (c) the auditor ceasing to hold office must notify the appropriate audit authority and the Registrar.
        (2) The notice must —
        (a) inform the appropriate audit authority that he has ceased to hold office, and
        (b) be accompanied by a copy of the statement deposited by him at the LLP's registered office in accordance with section 488 (statement by auditor to be deposited with LLP).
        (3) If the statement so deposited is to the effect that he considers that there are no circumstances in connection with his ceasing to hold office that need to be brought to the attention of members or creditors of the LLP, the notice must also be accompanied by a statement of the reasons for his ceasing to hold office.
        (4) The auditor must comply with this section —
        (a) in the case of a major audit, at the same time as he deposits a statement at the LLP's registered office in accordance with section 488 (statement by auditor to be deposited with LLP),
        (b) in the case of an audit that is not a major audit, at such time (not being earlier than the time mentioned in subsection (4)(a)) as the appropriate audit authority or the Registrar may require.
        (5) In this section, "major audit" means an audit conducted under this Part in respect of —
        (a) an LLP whose securities have been listed on a recognised investment exchange, and
        (b) any other person in whose financial condition there is a major public interest.
        (6) In determining whether an audit is a major audit within subsection 5(b), regard shall be had to any guidance issued by the Registrar.
        (7) A person ceasing to hold office as auditor who fails to comply with this section commits a contravention of the Companies Regulations.
        (8) If that person is a firm a contravention is committed by:
        (a) the firm, and
        (b) every officer of the firm who is in default.
        (9) A person does not commit the contravention referred to in subsection (7) if he shows that he took all reasonable steps and exercised all due diligence to avoid the commission of the contravention.
        (10) A person who commits the contravention referred to in subsection (7) shall be liable to a level 2 fine.

      • 492. Effect of casual vacancies

        If an auditor ceases to hold office for any reason, any surviving or continuing auditor or auditors may continue to act.

      • 493. Voidness of provisions protecting auditors from liability

        (1) This section applies any provision —
        (a) for exempting an auditor of an LLP (to any extent) from any liability that would otherwise attach to him in connection with any negligence, default, breach of duty or breach of trust in relation to the LLP occurring in the course of the audit of accounts, or
        (b) by which an LLP directly or indirectly provides an indemnity (to any extent) for an auditor of the LLP, or of an associated LLP, against any liability attaching to him in connection with any negligence, default, breach of duty or breach of trust in relation to the LLP of which he is auditor occurring in the course of the audit of accounts.
        (2) Any such provision is void, except as permitted by —
        (a) section 494 (indemnity for costs successfully defending proceedings), or
        (b) sections 495 to 497 (liability limitation agreements).
        (3) This section applies to any provision, whether contained in an LLP's LLP agreement or in any contract with the LLP or otherwise.
        (4) For the purposes of this section LLPs are associated if one is a subsidiary of the other or both are subsidiaries of the same body corporate.

      • 494. Indemnity for costs of successfully defending proceedings

        Section 493 (voidness of provisions protecting auditors from liability) does not prevent an LLP from indemnifying an auditor against any liability incurred by him in defending proceedings (whether civil or criminal) in which judgment is given in his favour or he is acquitted.

      • 495. Liability limitation agreements

        (1) A "liability limitation agreement" is an agreement that purports to limit the amount of a liability owed to an LLP by its auditor in respect of any negligence, default, breach of duty or breach of trust, occurring in the course of the audit of accounts, of which the auditor may be guilty in relation to the LLP.
        (2) Section 493 (voidness of provisions protecting auditors from liability) does not affect the validity of a liability limitation agreement that —
        (a) complies with section 496 (terms of liability limitation agreement) and of any rules made by the Board under that section, and
        (b) is authorised by the members of the LLP (see section 497 (authorisation of agreement by members of an LLP)).
        (3) Such an agreement is effective to the extent provided by section 498 (effect of liability limitation agreement).

      • 496. Terms of liability limitation agreement

        (1) A liability limitation agreement —
        (a) must not apply in respect of acts or omissions occurring in the course of the audit of accounts for more than one financial year, and
        (b) must specify the financial year in relation to which it applies.
        (2) The Board may make rules —
        (a) requiring liability limitation agreements to contain specified provisions or provisions of a specified description, and
        (b) prohibiting liability limitation agreements from containing specified provisions or provisions of a specified description.
        "Specified" here means specified in the rules.
        (3) Without prejudice to the generality of the power conferred by subsection (2), that power may be exercised with a view to preventing adverse effects on competition.
        (4) Subject to the preceding provisions of this section, it is immaterial how a liability limitation agreement is framed.

        In particular, the limit on the amount of the auditor's liability need not be a sum of money, or a formula, specified in the agreement.

      • 497. Authorisation of agreement by members of the LLP

        (1) A liability limitation agreement is authorised by the members of the LLP if it has been authorised under this section and that authorisation has not been withdrawn.
        (2) A liability limitation agreement between an LLP and its auditor may be authorised —
        (a) by the members of the LLP passing a resolution, before it enters into the agreement, waiving the need for approval,
        (b) by the members of the LLP passing a resolution, before it enters into the agreement, approving the agreement's principal terms, or
        (c) by the members of the LLP passing a resolution, after it enters into the agreement, approving the agreement.
        (3) The "principal terms" of an agreement are terms specifying, or relevant to the determination of —
        (a) the kind (or kinds) of acts or omissions covered,
        (b) the financial year to which the agreement relates, or
        (c) the limit to which the auditor's liability is subject.
        (4) Authorisation under this section may be withdrawn by the members of the LLP passing a resolution to that effect —
        (a) at any time before the company enters into the agreement, or
        (b) if the LLP has already entered into the agreement, before the beginning of the financial year to which the agreement relates.
        Subsection (4)(b) has effect notwithstanding anything in the agreement.

      • 498. Effect of liability limitation agreement

        (1) A liability limitation agreement is not effective to limit the auditor's liability to less than such amount as is fair and reasonable in all the circumstances of the case having regard (in particular) to —
        (a) the auditor's responsibilities under this Part,
        (b) the nature and purpose of the auditor's contractual obligations to the LLP, and
        (c) the professional standards expected of him.
        (2) A liability limitation agreement that purports to limit the auditor's liability to less than the amount mentioned in subsection (1) shall have effect as if it limited his liability to that amount.
        (3) In determining what is fair and reasonable in all the circumstances of the case no account is to be taken of —
        (a) matters arising after the loss or damage in question has been incurred, or
        (b) matters (whenever arising) affecting the possibility of recovering compensation from other persons liable in respect of the same loss or damage.

      • 499. Disclosure of agreement by LLP

        (1) An LLP which has entered into a liability limitation agreement must make such disclosure in connection with the agreement as may be required under rules made by the Board.
        (2) The rules may provide, in particular, that any disclosure required by the rules shall be made in a note to the LLP's annual accounts (in the case of its individual accounts) or in such manner as is specified in the rules (in the case of group accounts)."

    • 29. 29. Supplementary provisions

      Section 500 applies to LLPs, modified so that it reads as follows —

      • 500. Minor definitions

        In this Part —

        "qualified", in relation to an auditor's report (or a statement contained in an auditor's report), means that the report or statement does not state the auditor's unqualified opinion that the accounts have been properly prepared in accordance with the Companies Regulations or, in the case of an undertaking not required to prepare accounts in accordance with the Companies Regulations, under any corresponding legislation under which it is required to prepare accounts,

        "turnover", in relation to an LLP, means the amounts derived from the provision of goods and services falling within the LLP's ordinary activities, after deduction of —

        (a) trade discounts,
        (b) value added tax, and
        (c) any other taxes based on the amounts so derived."